The Federal Council of the Swiss government is to write a report on the dangers of bitcoin, examining the effects it could have on Switzerland’s financial system and society in general.
Jean Christophe Schwaab of the Swiss Socialist Party submitted the request for the report in a postulate back in September.
At the time, he said he had submitted the request because he was concerned about the potential of bitcoin and other virtual currencies.
Luzius Meisser, president of Bitcoin Association Switzerland, said Schwaab’s postulate takes a wholly negative perspective, focusing on the risks of bitcoin and ignoring the opportunities.
This is why the Parliamentary Group for Digital Sustainability (ParlDigi) recently created a subsequent postulate, which asks for any report the Federal Council creates to include information about the benefits of digital currency.
“The constructive amendment of ParlDigi ensures that the opportunities are not ignored. Furthermore, it suggests an elegant way of treating bitcoins legally – namely as foreign currency, which would be a great outcome if shared by the Federal Council.”
He went on to say that treating bitcoin like any other foreign currency would provide “another boost in credibility for bitcoin” as well as legal certainty for both regulators and users.
Schwaab disagrees with Meisser and said he isn’t hoping for a wholly negative report. He agreed that he wants the report to focus on the potential threats, such as money laundering, but he also hopes it will consider “the opportunities for a country with a strong financial sector like Switzerland”.
Regulators beyond Switzerland have started to issue their opinions on digital currency, with the European Banking Authority (EBA) recently warning of the potential risks related to virtual currencies.
Stefan Greiner, of German law firm Xenion Legal, said: “The recent statement from the EBA about digital currency shows the discussion about economic and financial implications of bitcoins has now definitely begun.”
He went on to say that this discussion will continue for some time before any kind of conclusions are reached.
“For those supporting bitcoins, international cooperation is now more important than ever, as regulators will certainly cooperate on the matter,” he added.
The Bitcoin Foundation is encouraging cooperation within the global bitcoin community by setting up an international affiliates programme. It has already signed national affiliates in Canada and Australia.
“We welcome international coordination. Bitcoin is a global phenomenon, so it also makes sense to organize global support. However, we are not that fond of the approach the US foundation takes. We’ve been in contact with them and its affiliate programme actually is a subsidiary programme, exerting tight control over the local chapters.”
He went on to say that, during the last bitcoin meetup in Zurich, the majority of attendees voted against entering into such an agreement, as they felt it would be against the spirit of bitcoin – which supports decentralized systems.
“Therefore, we opted to keep Bitcoin Association Switzerland independent. This means that we will be able to decide on our own about membership fees, what we do with donations, how we organize ourselves and what our web site looks like,” he added.
Going back to the recent regulatory developments in Switzerland, Meisser said it could be months before a report is produced, as the next parliamentary session doesn’t begin until March. He is hoping, in the meantime, the Federal Council accepts the ParlDigi postulate, so its report can have some balance.