The Swiss National Bank has recently made it clear that it will not be adopting Bitcoin as part of its foreign currency reserves. Despite growing calls from crypto advocates, the SNB Chairman, Martin Schlegel, stated at the annual shareholder meeting that cryptocurrencies do not meet the institution’s requirements for liquidity and stability.
Schlegel emphasized the need for assets that can be reliably bought and sold, pointing out that digital currencies like Bitcoin exhibit too much price volatility to qualify. He specifically mentioned concerns about market liquidity and the significant fluctuations in value that cryptocurrencies experience.
This decision comes amidst a campaign by crypto supporters to mandate Bitcoin holdings through a constitutional amendment. Advocates argue that diversification is crucial in the face of increasing global economic risks, especially in light of recent market instability caused by factors like new tariff measures from the US.
Luzius Meisser, founder of the Bitcoin Initiative leading the referendum drive, spoke directly at the SNB meeting, highlighting Bitcoin as a valuable alternative asset in times of financial turmoil. While acknowledging that Bitcoin may not hold much value in normal scenarios, Meisser emphasized its potential in a world order with fading trust in government debt.
Despite Switzerland’s reputation as a hub for blockchain innovation, the SNB remains cautious about embracing cryptocurrencies. Schlegel’s remarks indicate that the central bank will stick to traditional reserve assets like gold and major foreign currencies unless there are significant changes in the overall landscape.
The referendum campaign in Switzerland must gather 100,000 valid signatures within 18 months to trigger a national vote on mandating the SNB to hold Bitcoin. If successful, this initiative could set a precedent globally for central banks to adopt digital assets through legislation.
For now, the SNB remains unconvinced, citing the price instability and liquidity challenges associated with cryptocurrencies as key reasons for their reluctance to embrace Bitcoin. Despite the growing interest in digital assets, the central bank’s stance on traditional reserves remains firm.