Swiss National Bank Rejects Bitcoin as Reserve Asset

• Swiss National Bank President Martin Schlegel rejects Bitcoin as a reserve asset, citing its volatility and security risks for central banking.
• Despite global adoption, SNB prioritizes stability and liquidity, dismissing Bitcoin due to cybersecurity concerns and rapid price fluctuations.

Martin Schlegel, President of the Swiss National Bank (SNB), has firmly rejected the idea of central banks holding their reserves in Bitcoin. He claims Bitcoin lacks the qualities required to be decent money. The major reasons the SNB would not include the digital asset in its reserves, he underlined, are great volatility and security flaws.

On the other hand, even if the SNB is dubious about Bitcoin, worldwide interest in the digital asset keeps rising. Actually, one of the biggest asset managers in the world, BlackRock, revealed intentions to introduce a Bitcoin-based exchange-traded vehicle in Europe in February 2025.

Fascinatingly, Switzerland has been cited as a possible site for the product, mirroring the rising investor demand for exposure to cryptocurrency.

Bitcoin’s Liquidity Problem in Central Banking

For monetary policy uses, Schlegel clarified, central bank reserves had to be extremely liquid and used fast. He claimed Bitcoin falls short of these criteria. Apart from great price volatility, he also underlined that the technology underlying cryptocurrency can suffer security problems ranging from software faults to possible cyberattacks.

The denial is hardly shocking. Usually cautious in their choice of reserve assets, central banks give stability top priority over the possibility of big profits. But given that more and more financial institutions are including Bitcoin in their investment portfolios, the SNB’s austere posture seems to contradict the global trend.

Swiss Bitcoin Referendum Proposal

Fascinatingly, the public of Switzerland is pushing for Bitcoin even while the SNB is reluctant to embrace it. A suggestion suggesting the SNB keep some of its reserves in Bitcoin in addition to gold surfaced in December 2024, as we previously reported.

The initiative would need 100,000 signatures within 18 months to reach the public referendum level and therefore become a reality. But given Schlegel’s firm position, the SNB is probably going to oppose the project.

BlackRock Eyes Switzerland as Base for Bitcoin ETF

BlackRock sees great potential while the SNB closes the door on Bitcoin. In February 2025, the company intends to introduce an investment product based on Bitcoin into Europe. One of the key contenders for the goods is Switzerland, which has rather more liberal financial rules than other European nations.

BlackRock’s action demonstrates how the financial sector still regards Bitcoin as an asset with appealing value to investors in spite of central banks’ mistrust and authorities’. Should the product be successful, pressure on the SNB to begin including this digital asset into its reserve strategy could rise.

Now Switzerland finds itself at a crossroads in handling Bitcoin under growing pressure from several sides. On the one hand, its central bank vehemently objects to the formal reserve existence of this asset. On the other hand, society and the financial industry seem to be headed in opposite directions.

Recommended for you: