Swiss National Bank Rejects Bitcoin Reserves Amid Industry Pressure

Swiss National Bank Chairman Martin Schlegel has dismissed calls for the institution to add Bitcoin to its reserves, citing the cryptocurrency's inability to meet the requirements for currency reserves. During a shareholder meeting in Bern, Schlegel stated that cryptocurrency cannot currently fulfill the necessary conditions for the central bank's reserves. This statement comes amidst growing pressure from the local crypto industry to include Bitcoin in the central bank’s reserves.

Luzius Meisser, a board member of cryptocurrency broker Bitcoin Suisse, argued that holding Bitcoin makes sense as the world shifts towards a multipolar order, especially given the weakening of the dollar and the euro. However, Schlegel has previously expressed reservations about making Bitcoin a reserve asset, citing concerns over stability, liquidity, and security risks.

On the last day of 2024, the Swiss Federal Chancellery initiated a proposal to constitutionally mandate the Swiss National Bank to hold Bitcoin on its balance sheet. The proposal aims to amend the third paragraph of Article 99 of the constitution, which currently states that the Swiss National Bank shall create sufficient currency reserves from its revenues, part of which shall be held in gold. If successful, the amendment would add "and in Bitcoin" to the end of the paragraph.

The initiative is backed by the Swiss Bitcoin nonprofit think tank 2B4CH, which prepared and submitted the documents. The campaign is ongoing and requires 100,000 signatures to trigger a referendum in Switzerland. Meisser claims that holding Bitcoin would free the central bank from the political influence of its foreign currency holdings, most of which are in US dollars and euros. He argues that politicians may be tempted to print money to fund their plans, but Bitcoin cannot be inflated through deficit spending.

Yves Bennaïm, founder and chairman of 2B4CH, stated that the proposal is not about going all in with Bitcoin, but rather about having a small percentage of the central bank's nearly 1 trillion francs in reserves invested in an asset that is increasing in value and becoming more secure. Switzerland is known as a hub for blockchain enterprises, with its "Crypto Valley" in the town of Zug being the location where Ethereum was founded. The nation continues to generate crypto initiatives, with global grocery giant Spar rolling out Bitcoin-based payments in a Swiss city earlier this month.