Sovereign Money Initiative
Association for Monetary Modernization (MoMo)
GOALS:
- In the future, the National Bank will be the sole provider of electronic book money.
- Banks will then no longer be allowed to create their own money, but will only be allowed to lend money provided by savers, other banks, or the National Bank.
- The National Bank will put new sovereign money into circulation through loans to banks or debt-free transfer to the Confederation, cantons, or citizens.
ABOUT THE VOLLGELD INITIATIVE - 2018
Swiss Sovereign Money Initiative (Vollgeld Initiative - 2018)
In June 2018, Switzerland held a vote on a proposal called the Sovereign Money Initiative, or "Vollgeld." This was started by a group of citizens who wanted only the Swiss National Bank to have the power to create money.
What Was the Idea?
Supporters of the idea believed that the current system allows commercial (private) banks to create money by giving out loans. They argued that this creates money as debt, which gives banks too much power and can lead to problems like inflation, financial crises, and unsafe bank deposits. They wanted all new money — including digital money — to be created only by the central bank, not by private banks.
This idea isn’t new. Economists have discussed “full-reserve banking” (where banks can only loan out money they actually have) for many years. Some critics say this shows a misunderstanding of how modern banking and money creation really work.
The proposal was pushed forward by a Swiss group called the Monetary Modernization Association, which started gathering support in 2014. They collected more than 110,000 valid signatures, which was enough to force a national vote. The government scheduled the vote for June 10, 2018.
What Would Have Changed?
If approved, the plan would have changed the Swiss Constitution to say that only the Swiss National Bank could create all types of money, including the digital money held in people’s bank accounts. This would give the central bank more control and stop private banks from creating money through lending. However, printing physical money and minting coins would stay the same — that’s already controlled by the central bank.
Who Supported and Opposed It?
The Swiss National Bank and other major financial institutions strongly opposed the plan. They warned it could cause major instability, as no other country has this kind of system. They feared it would create uncertainty and hurt the economy.
Some people and publications supported the idea, saying it could make banking safer for regular people. For example, Martin Wolf from the Financial Times encouraged people to vote for it, arguing that current rules don’t do enough to prevent future financial crises. But others, including many economists, said the plan was unrealistic or based on a misunderstanding of banking.
What Happened in the Vote?
On June 10, 2018, 25% of Swiss voters approved of the initiative.
