Switzerland Rejects Bitcoin Reserve: Here Are the Reasons Behind the Negative Decision! - Coin Bulletin

The Swiss Central Bank (SNB) refused to add to its reserves, citing concerns about Bitcoin's market liquidity and volatility.

Switzerland Central Bank President Martin Schlegel stated during the bank's General Assembly meeting on Friday that Bitcoin (BTC) and other cryptocurrencies may experience serious liquidity problems, especially during times of crisis. Schlegel also expressed that the price volatility of cryptocurrencies poses significant risks in terms of long-term value preservation and therefore does not currently meet the high requirements of reserve currencies.

Schlegel's statement came in response to a proposal by Bitcoin Initiative, a Bitcoin advocacy group based in Switzerland. A research prepared by the group indicated that even adding only 1% Bitcoin to the SNB's portfolio could nearly double the returns and increase volatility very slightly. However, despite these findings, the SNB decided not to change its reserve policy.

Luzius Meisser, a member of the Bitcoin Initiative and a board member of Bitcoin Suisse, criticized the SNB's assessment by highlighting that Bitcoin has broken price records and has shown resilience during crisis periods. 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 based on political reasons. Particularly, the continuous criticism of Bitcoin by Christine Lagarde, the President of the European Central Bank, and the indication that member central banks of the ECB will absolutely not accept Bitcoin reserves are among the factors that strengthen this claim.

Central Banks are closing the doors to Bitcoin.

Other central banks in Europe continue to remain distant from Bitcoin reserves. While the Polish Central Bank and the Romanian Central Bank have announced that they will not be adding Bitcoin to their reserves, Jerome Powell, the Chairman of the Federal Reserve (Fed), has also stated that it is not legally possible for them to hold Bitcoin.

The Swiss Central Bank is indirectly exposed to Bitcoin through its shares in companies like MicroStrategy, Tesla, MARA Holdings, and CleanSpark, even though it does not hold Bitcoin directly as a reserve. The bank is known to be conducting test studies related to central bank digital currencies (CBDC). However, unlike the USA, Switzerland does not yet seem willing to establish a Bitcoin reserve at a strategic level.