Swiss National Bank Chief Dismisses Calls for a Strategic Bitcoin Reserve

Swiss National Bank (SNB) President Martin Schlegel has firmly rejected proposals for a strategic Bitcoin reserve in the national reserve portfolio. 

Schlegel argues that Bitcoin is essentially software and, as such, is susceptible to bugs and other vulnerabilities. “We all know that software can have bugs and other weak points,” he remarked, emphasizing that these technical flaws make Bitcoin too unstable for the rigorous demands of a reserve asset.

This move comes after Trump’s announcement for the inclusion of Bitcoin and Ethereum in the US national reserve.

Volatility and Liquidity: Major Roadblocks

A central issue in the debate over a strategic bitcoin reserve is Bitcoin’s notorious volatility and liquidity challenges. 

Central banks require assets that are stable and can be quickly liquidated during times of financial stress. Bitcoin’s dramatic price fluctuations pose a significant risk to monetary policy stability. 

In addition, its relatively low liquidity makes it difficult to execute large-scale transactions without causing disruptive market movements—risks that the SNB finds unacceptable for safeguarding public funds.

The Debate Over a Strategic Bitcoin Reserve

The concept of a strategic bitcoin reserve has garnered support from cryptocurrency advocates who see it as a diversification tool and a hedge against traditional financial risks. 

Proponents argue that including Bitcoin in national reserves could modernize asset management and help central banks adapt to a digital economy. 

However, Schlegel insists that any asset incorporated into the SNB’s reserves must meet strict criteria for stability, liquidity, and security—benchmarks that Bitcoin, in its current form, does not meet.

Global Perspectives and Future Implications

While some countries, like the U.S. and El Salvador, have embraced Bitcoin as part of their treasury strategies, many established financial institutions remain cautious. 

The global discussion over a strategic bitcoin reserve highlights the tension between embracing innovative digital assets and adhering to traditional risk management practices. For the SNB, stability and predictability remain paramount.

Prioritizing Stability Over Innovation

As debates continue, the SNB remains steadfast in its commitment to maintaining a secure and reliable reserve portfolio. 

Until Bitcoin can demonstrate consistent stability and robust liquidity, it will not be considered for inclusion as a strategic bitcoin reserve. 

For now, Switzerland opts to rely on time-tested assets to secure its financial future, leaving the innovative use of Bitcoin in central bank reserves as an idea for future exploration.

Also read: What Does Trump’s Announcement On Crypto Reserve Establishment for XRP, Bitcoin, and Ethereum Mean for These Tokens?