Swiss Central Bank Raises Doubts on Bitcoin Reserves Inclusion Over Environmental and Liquidity Issues

The Swiss National Bank (SNB) Chair, Thomas Jordan, expressed skepticism regarding Bitcoin's (BTC) inclusion in its reserves. Jordan doubts the sustainability of the petition aiming to revise the Swiss Constitution to include BTC as a hard reserve asset, citing concerns about energy consumption and liquidity.

Swiss Central Bank Casts Doubt on Bitcoin's Inclusion in Reserves Amid Energy and Liquidity Concerns

The National Bank of Switzerland (SNB) has expressed skepticism over a proposal to include Bitcoin (BTC) in its reserves, citing concerns about the cryptocurrency's environmental impact and liquidity.

In response to a petition seeking to amend the Swiss Constitution to allow for the SNB to hold Bitcoin, SNB Chairman Thomas Jordan has voiced reservations. The petition, launched by the non-profit think tank 2B4CH, aims to gather 100,000 valid signatures to force a referendum on the issue.

However, Jordan has stated that the SNB is not yet convinced about investing in Bitcoin, arguing that it is "not yet clear that it could be easily bought and sold as needed." He also raised concerns about the energy consumption associated with Bitcoin mining and its potential impact on climate change.

Despite Switzerland's reputation as a hub for blockchain and cryptocurrency innovation, Jordan's stance highlights the ongoing debate within central banks about the role of digital assets in monetary policy. Proponents of Bitcoin argue that its decentralized nature and scarcity make it an attractive reserve asset, while critics question its volatility and environmental sustainability.

Dr. Luzius Meisser, a long-time advocate for Bitcoin adoption by the SNB, has dismissed Jordan's concerns. He believes that Bitcoin would enhance Swiss sovereignty and financial independence, diversify the central bank's investment portfolio, and protect against potential losses on foreign government bonds.

Meisser argues that Bitcoin's value proposition as a long-term store of value surpasses that of traditional currencies, particularly in an era of unprecedented monetary expansion. He suggests that the SNB could follow the example of El Salvador, which has made Bitcoin legal tender, and benefit from the potential appreciation of the cryptocurrency.

The debate over Bitcoin's suitability as a reserve asset is likely to continue as central banks grapple with the implications of digital assets on monetary policy. While the SNB has expressed reservations, other central banks, such as the Bank of England, are actively researching the potential of central bank digital currencies (CBDCs).

The outcome of the petition to amend the Swiss Constitution will provide a significant test of public opinion on the role of Bitcoin in the financial system. If successful, it would mark a significant step towards the mainstream acceptance of cryptocurrencies as a legitimate asset class.

However, the SNB's concerns about Bitcoin's energy consumption and liquidity raise valid questions about its suitability as a reserve asset. It remains to be seen whether these concerns can be addressed sufficiently to convince central banks that Bitcoin has a place in their monetary portfolios.