Switzerland’s Debate Over Bitcoin’s Role in SNB Reserves
Switzerland is in the throes of a fiery debate over the inclusion of Bitcoin (BTC) in the Swiss National Bank (SNB) reserves. The debate is treading a middle path between cryptocurrency advocates and central bank officials as they attempt to balance digital assets with traditional financial systems.
As reported by Reuters on April 25, Martin Schlegel, Chairman of the SNB, stated during a shareholder meeting in Bern that “cryptocurrency cannot currently fulfill the requirements for our currency reserves.”
Luzius Meisser, a board member of the cryptocurrency platform Bitcoin Suisse, points out that Bitcoin offers protection against inflation and political interference, in contrast to traditional currencies like the dollar or euro. He suggests that even a small allocation, around 1-2%, of the SNB’s reserves in Bitcoin could improve the bank’s portfolio with very little risk. Meisser emphasized, “Bitcoin will be worth a lot in the specific scenario of a multipolar world order with fading trust in government debt.”
SNB’s Firm Rejection
In December 2024, a group of Swiss cryptocurrency advocates, led by entrepreneur Yves Bennaïm, launched the Bitcoin Initiative. The Initiative only has 18 months to gather the 100,000 signatures needed to bring the proposal to a national referendum. If successful, a Yes vote would amend the third paragraph of Article 99 of the Swiss Constitution, which currently reads: “The Swiss National Bank shall provide adequate reserves from its incomes in currency; some of these shall be stored in gold.”
Despite the growing support for the Bitcoin Initiative, the SNB remains firmly opposed to the idea. Martin Schlegel has rejected the proposal in public, citing a lack of key considerations. He refers to the uncontrollable volatility of cryptocurrencies, making them unsuitable to offer the stable value needed for reserves.
He also has other concerns about the security threat posed by cryptocurrencies, pointing out that, as software-based, they’re open to technical failures like bugs. Lastly, Schlegel dismisses cryptocurrencies as not having the necessary features for a stable currency and calls them a “niche phenomenon.”
The uproar over Bitcoin’s place in Switzerland’s economy reflects a larger battle between stability and inflation. While Switzerland has embraced some aspects of the blockchain economy, playing host to Ethereum (ETH) and having a high percentage of its citizens holding digital currencies, the SNB’s conservatism reflects concerns over the viability and risk of including cryptocurrencies in the nation’s national reserves.
Meanwhile, El Salvador and nations like the Central African Republic (CAR) have recognized Bitcoin as legal tender, and in the U.S., states like Wyoming and Texas have become increasingly supportive of cryptocurrency development.