In other words, the Swiss franc already faces competition, not only against the currencies of other countries but also against alternative non-governmental currencies. 8  4  For further information, cf. ‘Bericht des Bundesrates zu virtuellen Währungen’ (Federal Council report on virtual currencies, in German only) of 25 June 2014 (www.news.admin.ch/NSBSubscriber/message/ attachments/35361.pdf). BIS central bankers’ speeches  However, the key issue is rather different. A modern economy with a well-developed financial market requires a statutory means of payment. The Swiss franc is the official unit of currency in our country; Confederation coins as well as SNB banknotes and sight deposits are Switzerland’s statutory means of payment. Therefore these instruments must be accepted as payment in this country by every individual, without restriction, unless otherwise agreed. A statutory means of payment creates legal certainty and efficiency in everyday life. Consequently, the governmental Swiss franc is indispensable in Switzerland, even in a situation of competition with private currencies. Moreover, as long as a central bank fulfils its mandate diligently, I do not consider it likely that a private currency can pose any serious competition to a state currency. Return to a gold standard The second reform idea, the return to a gold standard, is directly linked to the financial crisis. In some circles there are fears of massive inflation in the short or long-term as a result of the unprecedented relaxation in monetary policy worldwide. The solution that is sometimes proposed is a return to a gold standard, in other words, pegging the currency to gold.

At a minimum shouldn’t we aim for clarity on certain essential features, such as clarity on the rights of digital currency holders and the nature of assets that back a digital currency? Third, are there key activities that are cardinal to the functioning of digital currencies that require special attention from regulators? These may include actions to create, distribute, destroy, or and transfer digital currencies, and may also include key infrastructures, such as the technology that underpins a particular digital currency. To the extent that these critical activities are performed by actors that are not within a regulatory purview, should we fill this potential gap in oversight? Fourth, should we agree on a common approach across jurisdictions on least some aspects of a refined regulatory approach? Digital currencies can be designed to be used across borders. Key parties may be situated across the globe. If we are to reach ubiquity in regulation, or at least something approaching it, isn’t coordination the way to do so? The Financial Stability Board and the Basel Committee on Banking Supervision may address some of these questions, but it’s too soon to know what they will conclude. Last, should we consider other lenses through which to view these activities? Common sense dictates that we begin with an approach that considers protections for holders of digital currencies against unfair losses and the potential for certain digital currencies to present risk to financial stability. Are there other factors for us to consider? This is not easy stuff.