Sokipiriye Dokubo
Renowned for its stringent measures aimed at bolstering the Swiss Franc, the Swiss National Bank (SNB) is often lauded for maintaining the strength and stability of its currency on the global stage. Despite calls from various quarters within the crypto community urging the SNB to consider Bitcoin as a potential reserve currency, the bank appears to have reservations about such a move.
During the bank’s annual meeting, Thomas Jordan, the chairman of SNB, voiced his skepticism regarding Bitcoin, expressing concerns about the digital asset’s suitability for inclusion in the bank’s reserve portfolio.
Jordan highlighted several key drawbacks of Bitcoin, emphasizing its lack of liquidity, which is essential for currency reserves to be readily exchangeable and movable. In addition to liquidity concerns, he underscored Bitcoin’s sustainability, questioning its viability as a reliable medium of exchange.
“We have not yet made a decision to invest in Bitcoin, and there are valid reasons for this stance. Currency reserves must facilitate international payments, necessitating liquidity and sustainability. They should be readily tradable,” Jordan remarked.
Despite the SNB’s cautious approach, advocates within Switzerland are lobbying for greater support for Bitcoin within the country’s financial institutions. Luiz Meisser, chairman of Bitcoin Suisse, highlighted how the SNB has incurred losses by investing in declining international bonds instead of allocating funds to Bitcoin.
“I firmly believe that diversifying into Bitcoin would enhance the strength of the Swiss franc and the autonomy of the Swiss National Bank, reducing reliance on underperforming government bonds,” Meisser asserted.
The debate over whether the SNB should embrace Bitcoin as part of its reserve strategy reflects the broader discourse surrounding the integration of cryptocurrencies into traditional financial systems, with proponents advocating for its potential benefits while skeptics raise concerns about its suitability and stability.