Swiss Central Bank Chief Rejects Bitcoin as a Reserve Asset

Bitcoin Deemed Too Volatile for Swiss Reserves

The President of the Swiss National Bank (SNB), Martin Schlegel, has firmly dismissed the idea of holding Bitcoin in the country's reserves. He emphasized that the cryptocurrency’s extreme price volatility makes it unsuitable for preserving long-term value, a key requirement for the central bank’s investments.

Liquidity and Security Concerns

Schlegel also highlighted liquidity as a major factor in the SNB’s decision. The bank needs its reserve assets to be quickly accessible for monetary policy adjustments. Bitcoin, despite its growing adoption, does not meet this criterion due to fluctuating market demand and the risk of sudden price swings.

In addition to volatility and liquidity, security remains a significant concern. Bitcoin and other cryptocurrencies are software-based assets, making them susceptible to cyber threats, hacking, and potential system vulnerabilities. The SNB prioritizes secure and stable assets in its portfolio, further reinforcing its reluctance to add Bitcoin.

No Threat to the Swiss Franc

Despite the increasing global attention on cryptocurrencies, Schlegel described them as a “niche phenomenon” within the broader financial system. He expressed confidence that digital currencies do not pose a significant challenge to the Swiss franc’s stability or dominance.

Calls for Bitcoin Reserves Gain Momentum

While the SNB remains cautious, there have been growing calls within Switzerland to include Bitcoin in the country’s reserves. A recent initiative, backed by cryptocurrency advocates, seeks to constitutionally mandate the central bank to hold Bitcoin alongside gold. This proposal requires significant public support to be considered for a national referendum.

A Consistent Stance from the Swiss National Bank

Schlegel’s rejection of Bitcoin as a reserve asset is in line with previous statements from SNB leadership. Former chairman Thomas Jordan had similarly ruled out Bitcoin, citing its instability and unsuitability for the bank’s financial strategy.

As the debate over Bitcoin’s role in national reserves continues, the SNB maintains its commitment to traditional assets, prioritizing financial stability, security, and liquidity.

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