Swiss National Bank (SNB) Governor Thomas Jordan dismissed calls to include Bitcoin in the bank’s monetary reserves during a shareholder meeting in Bern on Friday. He argued that cryptocurrencies fail to meet the institution’s standards for reserve assets, citing concerns over liquidity, volatility, and regulatory compliance.
Key Reasons for Rejection
Liquidity Challenges
- Jordan emphasized that central banks must be able to buy and sell reserves swiftly. Cryptocurrencies like Bitcoin lack the deep, stable markets required for large-scale institutional transactions.
Extreme Volatility
- The SNB prioritizes assets that preserve value. Bitcoin’s price fluctuations undermine its reliability as a hedge against economic risks.
Regulatory Uncertainty
- Cryptocurrencies operate outside traditional financial frameworks, raising concerns about oversight and stability.
Advocates’ Counterarguments
Pro-Bitcoin activists, led by Luzius Meisser of the Bitcoin Initiative, argue that Bitcoin offers unique advantages in a "multipolar world" where trust in government debt is declining. They launched a referendum campaign to amend Switzerland’s constitution, urging the SNB to diversify reserves with Bitcoin alongside gold.
Meisser acknowledged Bitcoin’s speculative nature but contended its value would rise in scenarios of geopolitical instability or currency devaluation.
FAQs
Q: Why does the SNB oppose holding Bitcoin?
A: The bank cites insufficient liquidity, high volatility, and regulatory gaps as dealbreakers.
Q: Could Switzerland’s referendum force the SNB to buy Bitcoin?
A: Unlikely. Constitutional changes require broad consensus, and the SNB maintains operational independence.
Q: What’s the activist group’s goal?
A: To position Bitcoin as a hedge against global financial risks, similar to gold.
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Conclusion
While Bitcoin advocates push for innovation, central banks like the SNB prioritize stability. The debate reflects broader tensions between traditional finance and emerging technologies. For now, Switzerland’s reserves will remain cryptocurrency-free.