Swiss National Bank Expresses Doubts Over Bitcoin Inclusion in Currency Reserves

Despite advocacy, the Swiss National Bank's (SNB) Chairman Thomas Jordan reiterates concerns regarding the inclusion of Bitcoin in currency reserves. Citing concerns over volatility, energy-intensive mining, and the need for reserves to be liquid, sustainable, and tradable, the SNB remains cautious about its suitability as a reserve asset.

Swiss National Bank Expresses Hesitation Regarding Bitcoin Inclusion in Currency Reserves

Zurich, Switzerland - The Swiss National Bank (SNB) has cast aspersions on the feasibility of including Bitcoin in its currency reserves, citing concerns about its volatility, environmental impact, and liquidity.

SNB Chairman Thomas Jordan delivered these apprehensions at the bank's Annual General Meeting in Bern, emphasizing the bank's cautious stance on incorporating the cryptocurrency into its financial holdings.

"The Swiss National Bank has not yet taken a decision on whether to invest in Bitcoin," Jordan stated, underscoring the institution's need for sound reasoning when making such weighty decisions.

Currency reserves, Jordan explained, serve a crucial role in facilitating international payments and must adhere to specific criteria. Paramount among these criteria are high liquidity, safeguarding the swift execution of transactions; sustainable value retention, ensuring their resilience against market fluctuations; and ease of trade, enabling seamless conversions amid dynamic market conditions.

Jordan expressed skepticism regarding Bitcoin's suitability as a reserve asset, casting doubt on its stability amidst its inherent volatility and questioning its long-term viability as a store of value due to its energy-intensive mining process.

"The energy consumption associated with Bitcoin mining further complicates its long-term viability as a store of value," Jordan noted.

The SNB's reservations mirror concerns raised by other central banks and financial institutions worldwide. The Bank of England, for instance, has warned that Bitcoin's volatility poses risks to investors, while the European Central Bank has questioned its role as a reliable store of value.

Despite advocacy from some quarters, the SNB's hesitance underscores the prudence and caution that central banks are adopting toward cryptocurrencies. The onus remains on Bitcoin to address these concerns, proving its stability, environmental friendliness, and liquidity. Until these challenges are resolved, its widespread adoption as a currency reserve asset remains uncertain.