- The National Bank of Switzerland (SNB) expressed skepticism about the prospect of keeping Bitcoin (BTC) in its reserves.
- SNB Chair Thomas Jordan doubts the sustainability of the model proposed by an ongoing petition to revise the Swiss Constitution.
The Petition for SNB’s Bitcoin Adoption
Recently, a petition was launched to potentially pave the way to a referendum for Bitcoin’s inclusion in the National Bank of Switzerland’s reserves. The campaign was spearheaded by the non-profit think tank 2B4CH, which requires at least 100,000 valid signatures from Swiss voters for the amendment of Article 99, Clause 3 of the Swiss Constitution.
If the effort proves to be successful in the future, it would inject the word “Bitcoin” under the provision so the Swiss central bank would accept it as a hard reserve asset in addition to gold. The said part of the law currently reads, “The Swiss National Bank shall create sufficient monetary reserves from its profits; part of these reserves shall be held in gold.”
Under Switzerland’s direct democracy framework, the petitioners have 18 months from the start of the campaign to gather the required number of signatures to aid its passage.
SNB Chair Reacts
Swiss Central Bank Chairman Thomas Jordan, however, does not appear to be buying the idea of storing Bitcoin in the country’s coffers. This comes despite the strong presence of Switzerland in the blockchain and cryptocurrency space through the Crypto Valley Association.
“We have not yet decided that we want to invest in Bitcoin,” said Jordan in the bank’s Annual General Meeting on Friday. “Actually for good reasons.”
Of course, one of the central bank official’s points of contention in his interview with Reuters lies in BTC’s supposedly energy-intensive blockchain and carbon emissions. Surprisingly, Jordan may either be unaware or ignoring the fact that a majority of Bitcoin mining firms are now shifting to renewable energy sources for their operations, lest they risk ballooning their expenses amid the digital asset’s tightening supply if they continue sticking with the archaic ways that heavily depend on fossil fuels, including coal.
Jordan reminded the attendees that the SNB’s reserves serve as international payments. Hence, he questioned Bitcoin’s liquidity and sowed uncertainty about whether it could be easily bought and sold as needed.
Dr. Luzius Meisser, a long-time Bitcoin Suisse board member and advocate of SNB’s BTC adoption, argued that the referendum would ensure Swiss sovereignty and neutrality in the financial sphere. He believes it would also aid the central bank in the diversification of its investments.
“When I stood here two years ago, I suggested that the Swiss National Bank should sell one billion worth of European bonds per month and buy Bitcoins. With this strategy, our national bank could have amassed hundreds of thousands of Bitcoins at favourable prices. As of today, these Bitcoins would have more than doubled in value and we would have made a profit of over 30 billion”, Meisser stated on Twitter.
Responding to Jordan, Meisser noted how the SNB has made massive losses as of late on its investments in the government bonds of other countries. He pondered what could have been the scenario if the Swiss central bank bought Bitcoin instead similar to the bet made by El Salvador.
“I firmly believe that it would strengthen the Swiss franc and the independence of the Swiss National Bank if we spent less on loss-making government bonds and started holding Bitcoin,” Meisser explained.
“Imagine you had the possibility to send something of value to your great-grandchildren in the year 2099,” he added. “Would you prefer them to get 50,000 euros or a hard Bitcoin?”
“To me, the choice is clear,” the Bitcoin Suisse board member further remarked.
Meisser expects this to be a long journey to convince the SNB to add Bitcoin to its reserves. “It might even take a public referendum to get there” he said on Twitter.