Bitcoin supporters urge Swiss National Bank to posses cryptocurrency
Switzerland's digital currency enthusiasts are calling on the Swiss National Bank (SNB) to entrench bitcoin in their reserves, arguing that the global economic upheaval caused by U.S. President Trump's tariffs makes it crucial for the central bank to diversify its financial holdings.
A referendum campaign was launched in December aimed at amending the Swiss constitution to mandate the SNB to include bitcoin as part of its reserves, alongside the traditional gold hoard.
Luzius Meisser, a board member at Bitcoin Suisse, a cryptocurrency broker, claims having bitcoin would insulate the SNB from political meddling on the value of its overseas currency reserves, three-quarters of which are denominated in dollars and euros. Meisser will be addressing the SNB's annual general meeting in Bern this Friday.
He reasons that buying bitcoin would free the SNB from political influence, as it's immune to inflation through excessive spending. "Politicians can't resist the urge to print money, but bitcoin is a currency that cannot be inflated," Meisser notes.
The Swiss countryside has become a breeding ground for blockchain and cryptocurrency innovation, becoming affectionately known as "Crypto Valley." According to a study by Lucerne University of Applied Sciences and Arts, 11% of the Swiss population has already invested in cryptocurrencies.
However, SNB remains skeptical, flagging large price swings, liquidity concerns, and security risks as the primary reasons for not owning crypto. The bank chairman, Martin Schlegel, has described cryptocurrencies as buggy software prone to vulnerabilities.
Yves Bennaim, organizer of the Bitcoin Initiative, defends the underlying technology behind bitcoin, stating it is one of the most reliable and secure IT systems ever developed and constantly evolving. Both Bennaim and Meisser, who hold bitcoin, insist their endorsement is not just self-serving since they're not advocating for crypto to boost their personal investments.
Despite the SNB's wariness, the liquidity and stability of the global bitcoin market, with a market cap nearing $2 trillion, make it an appealing investment option. Bennaim suggests a modest 1-2% allocation of the SNB's reserves in bitcoin could prove wise, given the cryptocurrency's potential growth and increasing security measures.
In a controversial move, the SNB indirectly acquired Bitcoin by investing in MicroStrategy, a company with a substantial Bitcoin hoard, skirting its earlier reservations about Bitcoin's volatility, security risks, and liquidity concerns.
In essence, the case for the SNB holding Bitcoin hinges on reducing political influence, resisting inflation, and maximizing the value of its vast reserves by investing in a growing market. Conversely, critics point to Bitcoin's volatility, security concerns, and liquidity issues as possible drawbacks. Notwithstanding the ongoing debate, bitcoin's growing popularity could push central banks worldwide to revisit their stance towards this revolutionary digital currency.
- Luzius Meisser, a board member at Bitcoin Suisse, argues that owning bitcoin would insulate the Swiss National Bank (SNB) from political meddling by making them immune to inflation through excessive spending, as bitcoin is a currency that cannot be inflated.
- Yves Bennaim, organizer of the Bitcoin Initiative, defends the underlying technology behind bitcoin, stating it is one of the most reliable and secure IT systems ever developed, and suggests a modest 1-2% allocation of the SNB's reserves in bitcoin could prove wise, given the cryptocurrency's potential growth and increasing security measures.
- Despite the SNB's wariness about bitcoin's volatility, security risks, and liquidity concerns, the liquidity and stability of the global bitcoin market, with a market cap nearing $2 trillion, make it an appealing investment option for central banks worldwide, pushing them to revisit their stance towards this revolutionary digital currency.
