Swiss National Bank Chief: Bitcoin Not Worthy of Reserve Status

Schlegel’s View on Bitcoin

In a recent interview with the Swiss media group Tamedia, Schlegel emphasized Bitcoin’s instability, arguing that its significant price fluctuations make it unreliable as a long-term store of value. He also pointed out liquidity concerns and security risks, reinforcing the SNB’s cautious approach to digital assets.

Schlegel’s latest comments are consistent with his previous skepticism. In November 2024, he described cryptocurrencies like Bitcoin and Ethereum as a "niche phenomenon" and questioned their viability as payment solutions due to extreme price swings and regulatory uncertainties. He also raised concerns about the environmental impact of cryptocurrency mining.

Swiss Movement for Bitcoin Reserves

Despite the SNB’s reservations, a movement is growing in Switzerland advocating for Bitcoin to be included in the central bank’s reserves. A public initiative has been launched, aiming to amend Swiss law to require the SNB to hold a portion of its reserves in Bitcoin, alongside traditional assets like gold.

For the initiative to move forward, organizers must collect 100,000 signatures within 18 months to trigger a national referendum. If successful, the vote could mark a significant shift in how Switzerland approaches cryptocurrency at the state level.

Global Perspectives on Bitcoin Reserves

The debate over Bitcoin’s place in national reserves extends beyond Switzerland. The Czech National Bank (CNB) has taken a more open stance, with its governor, Aleš Michl, proposing in early 2025 to invest billions of euros from the country’s reserves into Bitcoin. He suggested allocating up to 5% of the CNB’s €140 billion reserves to the cryptocurrency, arguing that diversification could provide long-term benefits despite Bitcoin’s volatility.

However, not all central banks share this perspective. European Central Bank (ECB) President Christine Lagarde has outright dismissed the idea of holding Bitcoin in ECB reserves, stating that it lacks intrinsic value and carries too many risks.

Key Concerns for Central Banks

The reluctance of major financial institutions like the SNB and ECB to embrace Bitcoin as a reserve asset is based on several core concerns:

• Volatility: Bitcoin’s price swings dramatically, making it unsuitable for institutions that prioritize stability.
• Liquidity: Although Bitcoin’s adoption is growing, its market depth may not be sufficient for large-scale central bank transactions.
• Security Risks: The digital nature of cryptocurrencies makes them vulnerable to hacking and fraud, raising concerns about asset protection.

A World Bank analysis has further warned that cryptocurrencies, lacking intrinsic value, are primarily driven by speculation and thus do not meet the safety standards required for central bank reserves.

The debate over Bitcoin’s role in national reserves is intensifying. While some, like the Czech National Bank, see potential benefits in diversification, others, including the Swiss National Bank and the European Central Bank, remain deeply cautious. As cryptocurrency markets continue to mature, central banks worldwide will have to reassess their positions on digital assets, but for now, skepticism remains the dominant stance.