One of the most influential think tanks in Switzerland believes that it’s time for the country to launch a national cryptocurrency. In its latest report, Avenir Suisse has also recommended the adoption of distributed ledger technology (DLT) in the country.
In the report dubbed ‘Blockchain after the Hype,’ the think tank blasted the common outlook on blockchain, saying it focuses more on the risks and ignores the opportunities. However, the adoption of this technology in Switzerland could greatly benefit the country, the authors of the report argued.
They singled out the three areas that are set to benefit the most from integrating blockchain technology. The first is in trade finance, where blockchain can ease the amount of administrative work required. This would reduce the expenses and make the process faster. Secondly, integrating blockchain would position the country as the pioneer in trading tokenized securities globally. This will help the country expand its relatively small capital market, the report argued.
Blockchain technology will also benefit wealth managers, enabling them to exploit new business models such as the ‘safekeeping of the private keys required for access to any DLT system.’
The report, compiled by Jennifer Anthamatten and Pascal Lago, two senior researchers for Avenir Suisse, also laid out the steps that the country needs to take to become a DLT nation. The first should be on regulation, it stated, with the biggest challenge being striking the balance between legal certainty and lean regulation.
The report recommended: “Regulation should be made technology-neutral. Wherever possible and reasonable, Finma should also be exploiting the potential of regtech more fully by making machine-readable regulation available.”
The country must also consider how the adoption of DLT will affect its international relations. With mounting competition in the global DLT arena, the country must keep its employment market “open and attractive to people from abroad.”
The biggest recommendation by Avenir Suisse was the adoption of a national cryptocurrency, backed by the country’s national bank. The report stated: “It would facilitate tokenized securities trading if the National Bank and major players in the industry were to drive the development of a Swiss franc token.”
Switzerland has been one of the early adopters of blockchain technology. The adoption has especially been boosted by the country’s Crypto Valley of Zug where many blockchain startups have set up operations.
However, Avenir Suisse believes that this isn’t enough stating: “Useful groundwork has already been done in all these areas in Switzerland. But the time for pioneers is over: Switzerland now has to take the next step in the development of DLT, morphing from the much-vaunted “Crypto Valley” into a fully-fledged DLT nation.”
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