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A Minting Mold for the eFranc: A Policy Paper

Author

Listed:
  • Hans Gersbach

    (CER-ETH –- Center of Economic Research and CEPR, ETH Zurich, Switzerland)

  • Roger Wattenhofer

    (Distributed Computing Group, ETH Zurich, Switzerland)

Abstract

We suggest a blueprint for an eFranc as a possible complement for the Swiss monetary system to ensure the long-term stability of its money. An eFranc is a non-interest-bearing digital form of the legal tender available to the public. The public can convert banknotes or part of its bank deposits into eFrancs, subject to the banks’ ability to obtain the corresponding amount of eFrancs from the central bank. There is free conversion of eFrancs into bank deposits (and into banknotes). For the technical implementation of the eFranc, we suggest a two-layer system combining a permissioned asynchronous blockchain without consensus which provides a secure environment for validating transactions (base layer) plus a peer-to-peer payment network (top layer).

Suggested Citation

  • Hans Gersbach & Roger Wattenhofer, 2020. "A Minting Mold for the eFranc: A Policy Paper," CER-ETH Economics working paper series 20/342, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    • Handle: RePEc:eth:wpswif:20-342
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    File URL: https://www.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-20-342.pdf
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    References listed on IDEAS

    as
    1. McLeay, Michael & Radia, Amar & Thomas, Ryland, 2014. "Money creation in the modern economy," Bank of England Quarterly Bulletin, Bank of England, vol. 54(1), pages 14-27.
    2. Charles M. Kahn & Francisco Rivadeneyra & Tsz-Nga Wong, 2018. "Should the Central Bank Issue E-money?," Staff Working Papers 18-58, Bank of Canada.
    3. Raphael Auer & Rainer Boehme, 2020. "The technology of retail central bank digital currency," BIS Quarterly Review, Bank for International Settlements, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Raphael Auer & Rainer Boehme, 2021. "Central bank digital currency: the quest for minimally invasive technology," BIS Working Papers 948, Bank for International Settlements.

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    More about this item

    Keywords

    eFranc; Swiss Monetary System; Financial Stability; Swiss National Bank; Proof-of-stake Blockchains;
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