account ; but they can also use an official currency as their unit of account. on the one hand there are private issuers, who claim that the value of their tokens is stable against official currencies ; in our illustration we assign this type of token money to the ‘ stable coins ’ category. however, state institutions such as central banks can also issue digital token money – the snb, for example, could issue a swiss franc token. ladies and gentlemen, as you see, digital token money can take a number of forms. it is important that we understand the characteristics and implications of these various tokens, as they could influence the snb ’ s mandate. i will now set out our thoughts on this topic. privately issued digital token money let me start by outlining our view of cryptocurrencies, before moving on to discuss stable coins and state - issued digital tokens. we believe that cryptocurrencies and cryptocurrencybased tokens are of only limited use as payment instruments, stores of value and units of account because they are subject to major fluctuations. crypto tokens are more like speculative investment instruments than ‘ good ’ money in terms of their characteristics. users typically describe money as ‘ good ’ if it has a stable value over time, is broadly accepted, and enables efficient payments. given these parameters, it seems unlikely that crypto tokens will be widely used as money in switzerland. the picture may be different for stable coins, however. these are designed in such a way that they can potentially assume the characteristics of good money – for instance if they are pegged to stable, official currencies. in the simplest case, such an anchor would consist of a single currency. let ’ s take an example : an issuer of stable coins in swiss francs would typically pledge that his tokens are equal in value to swiss franc cash. when it comes to classifying these kinds of stable coins, two important factors need to be taken into page 3 / 7 consideration. the first concerns the strength of such a pledge. does the issuer explicitly commit to instantly and unconditionally converting the stable coins into swiss franc cash at nominal value? or is the pledge merely a statement of the issuer ’ s intention to keep the exchange value of his tokens stable against the swiss franc? the second key point concerns the credibility of the pledge. in the case of a swiss franc stable coin, the more

upswing. in the new forecast, inflation will rise more markedly at the end of the forecasting horizon due to an even more expansionary monetary policy since june. expansionary monetary policy to be continued at our last media conference, i pointed out that the national bank must be prepared to react quickly to changes in the economic situation. when the delay in economic recovery became discernible in summer, we acted immediately by again lowering interest rates. since then, nothing of basic significance has changed in our assessment of the situation. we shall adhere to our expansionary monetary policy in the foreseeable future. we will thus contribute to the economic rebound and continue to keep swiss franc investments unattractive. the low interest rate level and the relatively strong growth of monetary aggregates currently do not represent a threat to price stability. once a sustained economic recovery becomes discernible, we shall have to review our monetary policy and adjust it to the new circumstances. there is still no sign, however, that the time for this is approaching. on the contrary, the risks still point downward. should the recovery in the us and in europe be delayed or should the swiss franc appreciate markedly, the expected upswing in switzerland would be threatened. in such a case, the national bank is ready to react by appropriate means. under present conditions, however, our monetary policy is sufficiently expansionary. currently, the risk of deflation is being widely discussed. as can be seen from our forecast, this risk is likely to be negligible in switzerland in the medium term. certainly, in the short term it is always possible for special effects, e. g. a marked reduction in the oil price, to lead to negative inflation rates in individual quarters. nevertheless, we consider a continuously falling price level in conjunction with a strong decline in the demand for goods and in production improbable in the present circumstances. our expansionary monetary policy and the flexibility of the swiss economy would prevent such a development. in the present situation, however, other efforts are needed besides an expansionary monetary policy in order to maintain or to enhance the attractiveness of switzerland as an industrial and business centre. the efforts aimed at a further liberalisation of the domestic economy may not be abandoned. sectors suffering from structural problems must improve their competitiveness by means of consistent adjustments. our experience with the monetary policy concept let me briefly describe the experience gained with our monetary policy concept. we introduced this concept exactly three years ago. you are acquainted with