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Swiss National Bank Declines Bitcoin Reserve Proposal

The Swiss National Bank has declined proposals to include bitcoin in its reserve assets, citing volatility and liquidity concerns. This article explores the SNB's stance, counterarguments from the Bitcoin Initiative, and the broader implications for central bank digital asset policy.

In a decision that has sparked significant debate in financial and crypto circles alike, the Swiss National Bank (SNB) recently reaffirmed its stance against incorporating bitcoin into its reserve assets. At the bank’s General Assembly in April 2025, SNB President Martin Schlegel cited persistent concerns over volatility and liquidity as central to the decision. This comes amid growing public and institutional pressure to reconsider the role of digital assets in national financial strategies.

Table of Contents

The SNB’s Official Position

President Schlegel made it clear that cryptocurrencies like bitcoin do not currently meet the bank’s standards for reserve assets. While bitcoin markets may appear liquid under normal conditions, Schlegel stressed that "liquidity is naturally called into question during crises." Furthermore, the inherent price volatility of cryptocurrencies poses a threat to long-term value preservation—an essential criterion for reserve holdings.

“Cryptocurrencies are known for their high volatility, which is a risk for long-term value preservation,” Schlegel remarked.

He also pointed out that while technological advances are welcome, the SNB’s focus remains on stable, secure innovations—such as the bank’s ongoing central bank digital currency (CBDC) pilot for institutional payments—rather than on speculative assets.

The Bitcoin Initiative’s Counterargument

The decision met with disappointment from the Bitcoin Initiative, a pro-bitcoin advocacy group in Switzerland. Their data-driven analysis suggests that even a modest 1% allocation to bitcoin starting in 2015 would have nearly doubled the SNB's returns with only a minimal increase in annualized volatility.

Luzius Meisser, a board member of Bitcoin Suisse and part of the Initiative, argued that the volatility of bitcoin should not be viewed in isolation. Rather, it should be considered within the broader context of a diversified investment portfolio. According to Meisser:

“Bitcoin has shown resilience under market stress, enjoys deep liquidity with daily trading volumes in the tens of billions, and continues to be one of the most secure and reliable IT networks ever created.”

The Initiative also speculated that the SNB’s reluctance may be politically motivated, given Switzerland’s delicate financial and diplomatic ties with the European Union.

Political and Global Context

The SNB’s decision reflects a broader hesitance among central banks worldwide. European Central Bank President Christine Lagarde has been an outspoken critic of bitcoin, calling it “worth nothing” and “highly speculative.” She insists that bitcoin fails to meet the ECB’s reserve asset criteria: liquidity, security, and insulation from criminal activities.

This sentiment is echoed across much of Europe. The central banks of Poland and Romania have outright dismissed the possibility of holding bitcoin reserves. The U.S. Federal Reserve, too, is legally prohibited from holding bitcoin under the Federal Reserve Act.

However, contrasting signals are emerging. U.S. President Donald Trump recently signed an executive order establishing a strategic bitcoin reserve and crypto stockpile, along with a Crypto Council to manage digital asset strategies. The order also prohibits the development of a U.S. central bank digital currency, citing privacy concerns.

Indirect Bitcoin Exposure

Interestingly, while the SNB refuses to hold bitcoin directly, it has indirect exposure through equity investments in companies that hold bitcoin on their balance sheets. These include major stakes in Tesla, MARA Holdings, and CleanSpark. As of the end of 2024, the SNB held over 8 million shares in Tesla, one of the most prominent corporate holders of bitcoin.

This raises questions about consistency in the SNB’s approach—accepting exposure via equities while avoiding direct asset holding.

Implications for Central Banks and Crypto Policy

The SNB’s firm stance is a bellwether for how traditional financial institutions continue to grapple with digital assets. While risk aversion is understandable given central banks’ mandates for stability, the rapid evolution of the crypto ecosystem—and increasing integration into global financial markets—may eventually pressure such institutions to adapt.

The Swiss rejection, juxtaposed with the U.S. move toward strategic accumulation, paints a picture of diverging philosophies. On one hand, cautious conservatism; on the other, strategic positioning for future economic landscapes.

Conclusion

The SNB’s rejection of bitcoin reserves underscores the enduring tension between innovation and stability in monetary policy. While advocacy groups point to potential gains and risk diversification benefits, central banks remain largely conservative, constrained by policy mandates, legal frameworks, and geopolitical sensitivities.

Switzerland, long known for its financial independence and innovation, may yet revisit this stance. But for now, bitcoin remains off the books at one of the world’s most influential central banks.

FAQs

Why did the Swiss National Bank reject adding bitcoin to its reserves?

The SNB cited high volatility and uncertain liquidity during crises as reasons why bitcoin does not meet the stringent requirements for official reserve assets.

What is the Bitcoin Initiative, and what was their argument?

The Bitcoin Initiative is a pro-bitcoin advocacy group in Switzerland. They argued that a small bitcoin allocation would have significantly improved the SNB's portfolio returns with minimal additional risk.

Does the SNB have any bitcoin exposure at all?

Yes, indirectly. The SNB holds shares in companies like Tesla and MARA Holdings, which maintain bitcoin on their corporate balance sheets.

Are other central banks considering bitcoin reserves?

Most major central banks, including the ECB and the U.S. Federal Reserve, have rejected the idea of holding bitcoin. However, the U.S. government under President Trump has launched a strategic bitcoin reserve initiative, signaling a more favorable stance.

Could political concerns influence the SNB’s decision?

Yes, the Bitcoin Initiative suggests that adopting bitcoin could be perceived as a sign of distrust toward fiat currencies, potentially straining Switzerland’s relationships with the EU and other partners.

That's all for today, see ya tomorrow! If you want more, be sure to follow our X (@croxroadnewsco), Instagram (@croxroadnews.co), Youtube (@thebitcoinlibertarian), Tiktok (@croxroadnews) and nostr - [email protected]

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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