The governing board of the Swiss National Bank (SNB) has declared it will not add Bitcoin to its reserves. According to the bank’s president, Martin Schlegel, the cryptocurrency’s excessive volatility and associated risks prevent it from being a viable choice.
The Unpredictability of Bitcoin Price
The primary reason for the bank’s rejection of Bitcoin as a reserve currency is its wild price fluctuations. Schlegel argued that the cryptocurrency does not meet the central bank’s criteria for assets that are stable and liquid enough to support monetary policy. Cryptocurrencies are known for their sudden and dramatic price changes, which, according to Schlegel, makes them unsuitable for use as a national reserve. Bitcoin price has witnessed a roller coaster ride with record-breaking highs and equally dramatic falls. While investors may view such volatility as a profitable opportunity, central banks generally avoid such unpredictable assets.
Security Concerns: A Major Deterrent
Another factor that dissuades the bank from adopting Bitcoin is the inherent security risks. Given the software-based nature of Bitcoin, it is vulnerable to glitches and cyberattacks. According to Schlegel, such security hazards make it an inappropriate choice for a central bank, which must maintain the utmost safety in its asset holdings. Bitcoin’s decentralized nature hasn’t protected trading platforms and wallets from becoming targets for cybercriminals. This has raised security concerns further, with the most recent attack on crypto exchange Bybit resulting in a loss of $1.5 billion.
Nonprofit Proposes Bitcoin as Reserve Currency
Despite the stance of the Swiss National Bank, some groups in Switzerland are advocating for a change. A nonprofit think tank known as 2B4CH is pushing for Bitcoin’s inclusion in the national reserves. This group has proposed a constitutional amendment requiring the SNB to hold cryptocurrencies in addition to gold and other traditional assets. It needs to gather 100,000 signatures by June 30, 2026, to present its proposal for a public referendum. If successful, Swiss citizens will have a say in deciding Bitcoin’s potential role in the nation’s reserves.
International Observers Monitor Switzerland’s Bitcoin Debate
Switzerland is not the only country wrestling with the idea of incorporating Bitcoin into its reserves. Since 2021, El Salvador has been gradually increasing its Bitcoin holdings, and both the Czech Republic and Hong Kong have entertained similar ideas. Meanwhile, Poland has expressly stated that it will not include Bitcoin in its national reserves, pointing to its lack of stability. For the time being, the Swiss National Bank continues to prioritize traditional assets. While Bitcoin enthusiasts continue to champion its benefits, its acceptance as a reserve currency in Switzerland seems unlikely in the near future.
Frequently Asked Questions
Why won’t the Swiss National Bank include Bitcoin in its reserves?
The bank cites Bitcoin’s excessive volatility and associated security risks as key reasons for not including it in its reserves. SNB requires assets that are stable and liquid enough to support its monetary policy.
Are other countries considering Bitcoin as a reserve asset?
A few countries like El Salvador, the Czech Republic, and Hong Kong have considered incorporating Bitcoin into their reserves. However, countries like Poland have expressly stated their intention not to include Bitcoin in their national reserves due to reasons similar to those of the SNB.
What is the proposal from the nonprofit, 2B4CH?
2B4CH, a nonprofit think tank, has proposed a constitutional amendment requiring the SNB to hold cryptocurrencies in addition to traditional assets. It plans to gather enough signatures by mid-2026 to present its proposal for a public referendum.
