In remarks on Friday, SNB President Martin Schlegel stated that holding Bitcoin introduces liquidity and volatility risks for Switzerland.
The Swiss National Bank has declined to hold Bitcoin reserves, citing concerns about the liquidity and volatility of the cryptocurrency market.
“For cryptocurrencies, market liquidity, while it may appear stable at times, is particularly called into question during crises,” said SNB President Martin Schlegel during the bank’s General Assembly meeting on Friday.
“Cryptocurrencies are also recognized for their high volatility, posing a risk to long-term value preservation. In short, cryptocurrencies currently do not meet the stringent requirements for our currency reserves.”
Schlegel’s remarks came in response to the Bitcoin Initiative, a bitcoin advocacy group whose research shows that incorporating Bitcoin into Switzerland’s treasury could enhance the overall portfolio and generate substantial returns with minimal volatility.
Since 2015, the Swiss National Bank’s investments grew by around 10%. However, a 1% allocation to Bitcoin in the central bank’s portfolio would have nearly doubled returns during the same period, according to a Bitcoin Initiative portfolio simulation. The annualized volatility would have only slightly increased.
The Bitcoin Initiative stressed that Bitcoin’s volatility should not be assessed in isolation but rather in relation to its impact on the broader dynamics and performance of the investment portfolio.
“Bitcoin has reached new highs, demonstrated resilience during market stress, and remains highly liquid with daily trading volumes in the double-digit billions, even on bank holidays,” said Luzius Meisser, a member of the Bitcoin Initiative and board member of Bitcoin Suisse.
“The Bitcoin network remains one of the most reliable and secure IT systems ever developed. Remarkably, the United States has begun building a strategic Bitcoin stockpile.”
In an emailed statement to CoinDesk, the Bitcoin Initiative implied that the Swiss National Bank’s reluctance towards Bitcoin could be politically motivated, as it might be seen as “a sign of distrust towards other currencies” and could strain Switzerland’s delicate relationship with the European Union.
European Central Bank President Christine Lagarde has repeatedly criticized Bitcoin, labeling it as “worthless” and a “highly speculative asset” tied to money laundering. In January, Lagarde expressed confidence that “bitcoins will not be part of the reserves of any central bank within the General Council” of the ECB.
Her comments came after Czech National Bank Governor Ales Michl suggested his institution was considering adding Bitcoin to its reserves. Lagarde argued that Bitcoin does not meet the ECB’s standards for liquidity, security, or protection from criminal associations.
In February, Poland’s central bank firmly ruled out “holding reserves in Bitcoin under any circumstances,” while the Romanian central bank advised banks against issuing loans to crypto companies.
In December 2024, Federal Reserve Chair Jerome Powell stated that the U.S. central bank is “not permitted to own Bitcoin” under the Federal Reserve Act and has no plans to seek a change in the law.
As of the end of 2024, the Swiss National Bank holds indirect Bitcoin exposure through stocks in companies with corporate Bitcoin treasuries, including 520,000 shares of Strategy, 8.12 million shares of Tesla, 580,000 shares of MARA Holdings, and 500,000 shares of CleanSpark, according to Fintel data.
Schlegel dismissed calls from citizens to add Bitcoin reserves to the Swiss central bank’s holdings as recently as last month. On Thursday, Schlegel mentioned that the SNB is currently running a pilot project using central bank digital currencies to facilitate payments between financial institutions.
In contrast, U.S. President Donald Trump signed an executive order this year to establish a strategic Bitcoin reserve and crypto stockpile, along with a Crypto Council to explore budget-neutral ways to enhance U.S. digital reserves. The order also prohibits government agencies from creating or promoting a central bank digital currency in the U.S., citing privacy concerns for citizens.
