Swiss National Bank Rejects Bitcoin Reserves Proposal

According to CoinDesk, Swiss National Bank (SNB) President Martin Schlegel has dismissed the idea of incorporating bitcoin into Switzerland's central bank reserves. Schlegel highlighted concerns over the cryptocurrency's volatility, liquidity, and security as primary reasons for this decision. In an interview with the Tamedia group, he emphasized that the instability of cryptocurrencies makes them unsuitable for preserving long-term value. Schlegel further explained that the central bank's reserves must remain highly liquid to be readily available for monetary policy interventions. He also pointed out the inherent security risks associated with software-based assets, noting that software can be prone to bugs and vulnerabilities. These remarks come amid a broader discussion in Switzerland regarding the potential inclusion of bitcoin in the SNB's reserves. A recent initiative, spearheaded by entrepreneur Yves Bennaim, is advocating for a constitutional amendment that would require the SNB to hold bitcoin alongside gold in its reserves. This initiative, launched in December, aims to gather 100,000 signatures within 18 months to prompt a nationwide vote on the matter. While the proposal does not specify the exact bitcoin allocations, it suggests that the reserves should be built from the bank's earnings. Despite the increasing acceptance of cryptocurrencies in Switzerland, with several Swiss banks offering cryptocurrency-related services, Schlegel remains skeptical. He described cryptocurrencies as a "niche phenomenon" and expressed confidence in the Swiss franc's continued strength. Schlegel stated that the SNB is "not afraid of competition from cryptocurrencies," underscoring the enduring stability of traditional currencies.