Swiss Parliament Examines New ‘Gold Franc’
Mark O'Byrne | May 22, 2012 08:15AM ET
A Swiss-parliament panel is discussing, today, the introduction of a parallel ‘gold-franc’ currency.
The panel will discuss a proposal aimed at introducing a new currency known as the 'gold franc'. Under the proposal, which will be debated in the lower house’s economic panel in Bern, one gold coin would be worth about 5 Swiss francs ($5.30), according to published reports, which said the Swiss franc would remain the official currency.
The proposal may lead to a wider debate about the Swiss franc and the role gold might again play to protect the Swiss currency from debasement.
The initiative is part of the “Healthy Currency” campaign, which is being promoted by the country’s biggest party -- the conservative Swiss People’s Party (SVP).
The move appears to be a reaction to concern about the euro zone and global-financial turmoil plus a growing risk of inflation. It is also seeking to reverse the government’s current policy on gold, which floats the Swiss franc as a fiat currency -- like all modern currencies -- that's not backed by gold but by the promises of politicians and bankers.
In Switzerland, buying gold bullion, coins, bars and gold certificates requires professional advice as even the smallest gold coins can cost hundreds of francs.
A single new gold franc, on the other hand -- with a gold content of 0.1 grams -- could be purchased for just 5 francs (at current prices), which would, in theory, make the metal more widely owned throughout the population. That could lead it to become a medium of exchange as is the case in several U.S. states, where gold has become legal tender.
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