The Swiss National Bank has rejected proposals to include bitcoin in its currency reserves. The central bank’s chairman, Martin Schlegel, said cryptocurrencies do not meet the standards required for reserve assets.
A team of digital currency supporters has initiated a campaign to call on the SNB to add Bitcoin alongside gold. As per them, the existing financial volatility in the world makes it necessary to diversify.
Supporters identify global tensions and policy shifts, especially from the US, as the cause of financial uncertainty. Under such uncertainty, they say, Bitcoin could act as a refuge.
Bitcoin initiative faces pushback from SNB
The campaigners have embarked on a bid to modify the Swiss constitution. They want to pressure the central bank to include bitcoin in its reserve holdings. The development has created controversy in the financial world.
It was at the shareholders’ yearly general meeting of the SNB that Schlegel discussed the concept directly. Cryptocurrencies demonstrate wild value fluctuations, he declared. This, he said, introduces danger, not security.
He also cited the absence of liquidity in cryptocurrency markets. The SNB, according to him, needs to act promptly when it deals with its reserves. For that, stable and steady assets are needed. Schlegel stressed that the central bank currently does not view Bitcoin as a suitable reserve instrument.
He insisted that whatever currency it holds in reserves should contribute to the stability of the Swiss franc. Bitcoin falls short of attaining such a target due to its sudden price oscillations. The remarks came in the wake of a speech delivered by the leader of the Bitcoin Initiative.
SNB trusts gold and foreign currencies over crypto
He characterized Bitcoin as a unique currency and a hedge in the future in times of uncertainty worldwide. Even with such a sales pitch, however, the central bank holds back. The SNB has been traditionally conservative in its reserve policy.
It holds a composition of foreign currency and gold at present. The assets, the officials contend, bring the balance and predictability essential in economic resilience. Although the controversy lingers, the SNB has no intention of revising its stance.
For the meantime, Bitcoin will stay out of its vaults. The task of guarding the Swiss economy stays in the hands of tried financial instruments. The urge to go digital, while vociferous, has not been persuasive for the country’s preeminent financial regulator yet.
