Published: Tue, June 12, 2018
Markets | By Otis Pena

Swiss vote down ‘dangerous’ overhaul of banks

Swiss vote down ‘dangerous’ overhaul of banks

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.

The concerns over the possible risks to the economy in Switzerland through introducing real money or "vollgeld" systems appeared to be the convincing factor that voters rejected the bid.

SRF public television reported that unofficial returns Sunday showed that 76 percent of the ballots cast opposed the so-called sovereign money referendum, while 24 percent supported it.

The initiative would have meant that commercial banks would not be able to create new money, and would only be able to lend money if they held the deposits to back it up.

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The Vollgeld Initiative, also known as Sovereign Money, attracted global attention because it would have upended the banking system in a country known for its banks.

The plan, if accepted could have repercussions beyond Switzerland's borders by removing a practice which underpins most of bank lending in the world.

Support grew for the reform following the economic crisis of 2008 with campaigners insisting that their ideas would make the Swiss banking system securer and protect the savings of the people from a possible bank run.

But opponents, including the SNB, Swiss government and the banks, have said the plan was a risky experiment which could damage the Swiss economy.

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