Swiss National Bank President Martin Schlegel rejects Bitcoin reserves

Swiss National Bank (SNB) Chair Martin Schlegel firmly opposed including Bitcoin in the national reserve, calling it incompatible with central bank requirements.

His comments were related to the SNB’s long-held prudent approach to digital assets, as debate over the role of cryptocurrencies in national financial systems continues at other central banks globally.

Schlegel said Bitcoin’s volatility would make it a bad reserve currency for a nation. While traditional assets such as gold or government bonds can restore stability, Bitcoin swings wildly over short time frames. That unpredictability, he said, makes it a bad store of value for a central bank responsible for maintaining financial stability. He said he can only put stable and liquid assets in the reserves.

He cautioned that Bitcoin lacks liquidity, and the central bank cannot rely on it when the economy is bad. Although Bitcoin has a large market, its liquidity cannot match gold reserves or other traditional currencies. He added that selling large quantities of Bitcoin is impossible when market conditions are hit.

SNB Chair Martin Schlegel on the set of the SRF Eco Talk show. Source: @retolipp (X/Source)

Swiss National Bank chair considers crypto a niche financial product

Bitcoin remains a niche financial product even as investors and the public show increasing interest, Schlegel said. BTC is transacted but generally viewed as a speculative asset, not money exchanged in dollars.

Schlegel added that Bitcoin is free from the regulatory structure of conventional finance. A government does not manage it, so it is not subject to central bank monetary policy (e.g., deploying and adjusting money as economic conditions change). Bitcoin is not regulated, which makes it difficult for central banks to integrate it into their financial systems.

However, outside of financial concerns, Schlegel noted environmental criticism of Bitcoin mining. The process requires significant computing power and consumes tremendous energy, prompting questions about sustainability. Multiple states are seeking to reduce their carbon footprints, and further adding Bitcoin to their national reserves would go against the movements toward cleaner energy and more environmentally friendly practices.

Regulatory challenges further complicate the matter. Cryptocurrencies have been linked to illegal activities such as money laundering and tax evasion, leading to increased scrutiny from financial regulators worldwide.

Schlegel stressed that any asset included in Switzerland’s reserves would have to meet very high standards of financial regulation—which Bitcoin does not currently meet.

Schlegel also noted that digital technology was gradually inching its way into finance before dismissing Bitcoin as a reserve asset. He emphasized that the Swiss central bank’s engagement with modern payment systems must not be construed as a “conversion” to cryptocurrencies.

Like other central banks, Swiss authorities are working on a central bank digital currency (CBDC), a digital Swiss franc. CBDC is a regulated central bank-guaranteed currency, whereas Bitcoin is the opposite. On the other hand, SNB has been anticipating payment arrangements for high-velocity scale deals.

But Schlegel said the trend did not bode ill for the future of cash, which remains a linchpin of Switzerland’s financial architecture. “Physical cash,” he said, provides resilience and access to those outside of electronic payment systems.

Supporters push a Bitcoin referendum forward despite SNB’s opposition

Despite the SNB’s firm stance, a group of cryptocurrency supporters in Switzerland is pushing for a national referendum requiring the central bank to hold Bitcoin as part of its reserves. The initiative must gather 100,000 signatures to move forward, allowing Swiss citizens to vote on the matter.

The Bitcoin proposal for a “financially sound, sovereign and responsible Switzerland” was submitted on December 5 and was officially registered in Switzerland’s Federal Gazette on December 31.

It specifically proposes Article 99 Paragraph 3 of the Swiss Federal Constitution to be amended to: “The National Bank builds up sufficient monetary reserves from its own earnings; part of these reserves are made up of gold and Bitcoin.”

The initiative calls for a change to the constitution, stating that the SNB should build up currency reserves from its earnings, part of which should be held in gold and Bitcoin. The text does not specify how much Bitcoin should be held.

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