The Swiss National Bank (SNB) refused to add Bitcoin to its reserves, citing concerns about market liquidity and volatility.
Swiss National Bank President Martin Schlegel stated during the bank's General Assembly meeting on Friday that Bitcoin (BTC) and other cryptocurrencies could experience significant liquidity issues, especially during times of crisis. Schlegel also expressed that the price volatility of cryptocurrencies poses significant risks for long-term value preservation and, for this reason, does not currently meet the high requirements for reserve currencies.
Schlegel's statement came in response to a proposal by the Bitcoin Initiative, a Bitcoin advocacy group based in Switzerland. A study prepared by the group revealed that even adding just 1% Bitcoin to the SNB's portfolio could nearly double the returns and increase volatility very little. However, despite these findings, the SNB decided not to change its reserve policy.
Bitcoin Initiative member and Bitcoin Suisse Board member Luzius Meisser criticized the SNB's assessment, emphasizing that Bitcoin has broken price records and has shown resilience during times of crisis. Meisser stated that the Bitcoin network is one of the most secure IT systems ever created and reminded that the US has established a strategic Bitcoin reserve this year.
On the other hand, the Bitcoin Initiative believes that the SNB's distant approach to Bitcoin is politically motivated. Particularly, European Central Bank President Christine Lagarde's continuous criticism of Bitcoin and the statement that central banks in the eurozone will definitely not accept Bitcoin reserves are factors that strengthen this claim.
Central banks are shutting their doors to Bitcoin
Other central banks in Europe continue to maintain distance from Bitcoin reserves. The Polish National Bank and the Romanian National Bank have stated that they will not add Bitcoin to their reserves, while US Federal Reserve Chairman Jerome Powell has also expressed that it is not legally possible for them to hold Bitcoin.
Although the Swiss National Bank does not hold Bitcoin directly as a reserve, it is indirectly exposed to Bitcoin through shares in companies like MicroStrategy, Tesla, MARA Holdings, and CleanSpark. The bank is known to be continuing its testing efforts related to central bank digital currencies (CBDCs). However, unlike the US, Switzerland does not yet seem willing to establish strategic-level Bitcoin reserves.
