One of the responses to the 2008 financial crisis is that to decentralize authority which means to take power away from the elites and spread it among regular people who suffered the most and had the least recourse when the economy crashed. Whereas the other response to the crisis has been to give even more power and responsibility to centralized authority and Switzerland’s “sovereign money” referendum well fits into this category.
On Sunday, June 10, Swiss voters will decide whether to support “Vollgeld,” a radical reform aimed at further centralizing financial authority or to axe the fractional-reserve banking system in which banks create money as a way of extending credit, lending out far more than they hold in deposits.
The two alternative visions on how to respond to the 2008 financial crisis have been competing for attention and support in the past decade and now it’s time for the Swiss voters to take their ultimate decision. The first strategy has been at the core of the crypto revolution it is the remedy prescribed by both the growing global bitcoin community and the supporters of the small government/low taxes concept, like the followers of the Tea Party movement in the U.S.
Such an initiative would not only centralize money creation at the central bank but also concentrate there the corresponding profits and the decisions on who should or shouldn’t receive loans. The oppositions seek that the referendum is a populist response to the previous financial crisis and with its success, it will also head to another crisis which might spark Brexit-like panic in the country’s huge banking sector.
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Expecting this to be an unlikely result it is expected that Swiss citizens will vote for more of the same, until the next crisis. However, Switzerland has become a crypto-friendly jurisdiction, with much more crypto-centric businesses being represented. The country has also set up a crypto valley in the canton of Zug and has been formally considering the possibility to issue a state-backed up with cryptocurrency.