Bitcoin remains ‘niche phenomenon,’ Swiss central bank says

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As a seasoned researcher with years of experience under my belt, I find myself in agreement with Martin Schlegel’s cautious stance towards cryptocurrencies. Having witnessed the meteoric rise and fall of various digital currencies over the past decade, I can attest to their inherent volatility and the challenges they pose for everyday transactions.

Even though cryptocurrency prices have significantly increased over the past few years, Martin Schlegel, chairman of the Swiss National Bank, expresses caution about virtual currencies.

Despite the Chairman Martin Schlegel’s assertion on November 7th, the Swiss National Bank maintains a conservative stance towards cryptocurrencies, emphasizing that traditional cash will still be vital in Switzerland’s payment system, according to Reuters.

From my perspective as an analyst, cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) have seen significant growth over the past few years. However, they continue to be considered a specialized or niche aspect of the financial world. Although I’m hesitant to predict the future of the crypto market in Switzerland, I find their volatility to be a substantial barrier for their everyday practicality in transactions.

Furthermore, Schlegel voiced worries over the high energy consumption of cryptocurrencies and their association with illegal activities, arguing that these factors complicate attempts at regulation.

Despite not immediately jumping on board with technological advancements, the Swiss National Bank underlines its intention to stay current, particularly through a project examining central bank digital currency for smoother interbank transactions. While Switzerland is considering the implementation of government-issued digital money, Schlegel emphasized that the SNB remains dedicated to traditional cash as well.

Though our electronic payment system has gone digital, we anticipate that physical cash will continue to hold significance in the years to come.

Martin Schlegel

In April, Thomas Jordan, who was then the Chairman of the Swiss National Bank, expressed doubts about Switzerland launching a public Central Bank Digital Currency (CBDC) anytime soon. He stated that the risks connected with this technology still exceed its potential advantages. Moreover, he pointed out that there are numerous efficient and innovative payment methods offered by the private sector to both consumers and businesses currently. Furthermore, introducing a retail CBDC could fundamentally alter the existing monetary structure.

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2024-11-08 11:30