Swiss National Bank Rejects Cryptocurrency Call
The Swiss National Bank (SNB) continues to reject calls for including Bitcoin in its reserves as a hedge against the ongoing macroeconomic chaos, a stand taken by the institution’s official recently. Martin Schlegel, the chairman of SNB, stated this during a shareholder meeting held in Bern. Schlegel insisted that cryptocurrency is, at the moment, unfit to meet the prerequisites for the country’s currency reserves.
Pressure from Local Crypto Sector
This statement by Schlegel comes amidst escalating pressure from the local cryptocurrency sector to incorporate Bitcoin in the central bank’s reserves. Luzius Meisser, a board member of Bitcoin Suisse – a cryptocurrency broker, persisted that it is sensible to hold bitcoin, especially given the current global shift towards a multipolar order. Making a bold claim, Meisser pronounced that the need for Bitcoin has become greater with the weakening of the dollar and the euro.
A Debatable Topic
The stand taken by Schlegel is not a recent phenomenon. Earlier in March, reports quoted Schlegel expressing his reluctance towards accepting Bitcoin as a reserve asset in Switzerland due to multiple factors such as stability issues, liquidity concerns, and security threats.
Swiss Federal Chancellery Proposal
On the last day of 2024, the Swiss Federal Chancellery submitted a proposal to mandate constitutionally the Swiss National Bank to hold Bitcoin in its balance sheet. For the proposal to result in a Switzerland-wide referendum, however, it needs to gather 100,000 signatures.
A Request for Change
The initiative requests a change in the third paragraph of Article 99 of the constitution. The text, as it presently stands, would have the addendum ‘and in Bitcoin’ if the campaign turns out successful. Preparations and submissions of documents for the initiative were the responsibility of the Swiss Bitcoin nonprofit think tank 2B4CH, which boasts ties to some of the heavyweights in the industry. Giw Zanganeh, vice president of energy and mining at Tether, a leading stablecoin issuer, was instrumental in launching the campaign.
A New Perspective
Meisser proposes that Bitcoin – which cannot be inflated via deficit spending unlike most currencies – would free the central bank from political influence over foreign currency holdings, most of which are in US dollars and euros. He further expresses that politicians usually succumb to the temptation of funding their plans by printing money, and Bitcoin would inherently dismantle this potential for financial manipulation.
The Crypto Haven – Switzerland
Switzerland, a hub for blockchain businesses, houses Crypto Valley in the town of Zug where Ethereum was founded. The nation continually generates cryptocurrency initiatives, one of the recent ones being the global grocery behemoth, Spar, introducing Bitcoin-based payments in a city in Switzerland earlier in the month. Crypto Valley recently exceeded the $593 billion valuation mark, showing the exponential growth trajectory of the region’s blockchain industry in 2024. Last year alone, 17 cryptocurrency startup unicorns emerged in the area.
Final Thoughts
With the broader acceptance of blockchain and cryptocurrencies, Swiss National Bank’s decision has become a hot topic for a debate. Although concerns like apprehension towards security risks and stability issues posed by Bitcoin are legitimate, the argument for Bitcoin becoming a reserve asset becomes stronger with the supposed weakening of traditional currencies like the dollar and euro. It remains to be seen whether Switzerland will adopt Bitcoin officially, just as it remains uncertain whether other countries will follow suit.
