Thomas Moser, a board director at the Swiss National Bank (SNB), the country’s central bank, has recently argued that cryptocurrencies and blockchain technology are “too primitive” for the country to issue a state-backed e-franc, according to local news outlet Swissinfo.
While speaking at the Crypto Valley blockchain conference in Zug, Moser compared blockchain technology in its current form to the “useless innovation” compact discs (CDs) were. The central bank board director noted that the digitization of music only became useful and practical once streaming changed the industry’s landscape through a whole new model.
According to him, cryptocurrencies will see a similar disruption. He said:
Something similar has to happen with bitcoin. People will only switch to something new if it works better or is cheaper.
Moser’s comments come a few days after the Bank for International Settlements (BIS) released a report on cryptocurrencies that argued they “promise a lot, but don’t always deliver.” The “bank for central banks” slammed cryptos like bitcoin for several perceived flaws, including the cost of running a Proof-of-Work (PoW) consensus algorithm, and their scalability.
These flaws, per the BIS, make cryptocurrencies unsuitable for a global means of payment. It’s worth noting that the financial institution’s general manager, Agustin Carstens, stated earlier this year that cryptocurrencies became a “combination of a bubble, a Ponzi scheme, and an environmental disaster.”
During the conference, while Moser reportedly dismissed cryptocurrencies, he did note blockchain technology was promising, but only when it “looks very different from what it does today.”
At the same event Swiss Economics Minister Johann Schneider-Ammann stated blockchain technology will “penetrate the economy,” while cautioning against the potential risks of moving too slowly or too quickly.
Last month, as CryptoGlobe reported, Switzerland’s Federal Council requested a study on the risks and benefits of launching its own cryptocurrency, the e-franc. The idea of a state-backed cryptocurrency was initially brought forward by Romeo Lacher, chairman of Swiss stock exchange SIX.
Switzerland is seen as a safe haven for cryptocurrency-related projects. Earlier this year, the country’s financial supervisor, the Financial Market Supervisory Authority (FNMA), published guidelines in support of initial coin offerings (ICOs.)