Swiss National Bank President Dismisses Bitcoin as a Reserve Asset

Swiss National Bank (SNB) President Martin Schlegel has expressed strong reservations about Bitcoin becoming a reserve asset for Switzerland. His comments come in opposition to a proposal by the Swiss Bitcoin nonprofit think tank 2B4CH and other cryptocurrency advocates, who have called for Bitcoin to be constitutionally mandated as a reserve asset held by the SNB.

Speaking to the Swiss media outlet Tamedia on March 1, Schlegel outlined several key reasons for his stance against Bitcoin's inclusion in the SNB’s reserves. Chief among his concerns are Bitcoin's volatility,

liquidity issues, and the security risks inherent in cryptocurrencies.

Volatility and Liquidity Concerns

Schlegel highlighted the high volatility of Bitcoin and other cryptocurrencies as a significant hurdle. “Bitcoin and other cryptocurrencies are too volatile, which isn’t conducive to maintaining the stability of the SNB’s investments,” he said. The Swiss National Bank’s reserves, according to Schlegel, need to be stable and liquid, enabling the central bank to utilize them swiftly for monetary policy purposes when necessary. Bitcoin's price fluctuations and the challenges in quickly converting it into liquid assets make it unsuitable as a reliable reserve.

Security Risks in the Digital Realm

Another issue Schlegel raised is the inherent risks in using digital assets for reserves. Since cryptocurrencies are governed by software, they are vulnerable to technical bugs and vulnerabilities. Schlegel noted, “We all know that software can have bugs and other weak points,” pointing to the ongoing security challenges in the digital currency space.

Bitcoin’s Role in the Global Financial System

Despite these concerns, Schlegel acknowledged the growing influence of the cryptocurrency market, which currently boasts a market value of nearly $3 trillion. However, he cautioned that the cryptocurrency industry remains a “niche phenomenon” when compared to the broader, more stable global financial system.

While some have speculated about the potential for Bitcoin or other cryptocurrencies to replace traditional fiat currencies, Schlegel made it clear that he does not view Bitcoin as a threat to the Swiss franc. “We’re not afraid of competition from cryptocurrencies,” he added.

A Call for Public Support

The proposal to make Bitcoin a reserve asset in Switzerland was introduced by 2B4CH and has been backed by several Bitcoin advocates. In order to move forward, the proposal needs to gather 100,000 signatures from Swiss citizens. If successful, it will be put to a public referendum. The group has until June 30, 2026, to collect the necessary signatures, a task that would require about 1.11% of Switzerland’s population of approximately 8.97 million people to support the initiative.

Switzerland’s Pioneering Role in Bitcoin Adoption

While the Swiss National Bank remains cautious about the prospect of Bitcoin as a reserve asset, Switzerland continues to be a leading hub for Bitcoin adoption. The city of Lugano, in particular, has become a focal point for cryptocurrency enthusiasts, hosting the annual “Plan ₿” conference and other Bitcoin-related events.

Global Context and Future Considerations

Schlegel’s comments come at a time when countries around the world are increasingly considering Bitcoin in their financial strategies. In the United States, Czech Republic, and Hong Kong, discussions are underway about potentially making Bitcoin a reserve asset. Meanwhile, El Salvador has made headlines by adopting Bitcoin as legal tender and stacking Bitcoin in its national treasury since September 2021. On the other hand, Poland recently ruled out the possibility of Bitcoin becoming a reserve asset.

While the debate continues globally, Schlegel's remarks underscore the caution central banks are taking toward integrating cryptocurrencies into their traditional financial systems.