Central Bank of Switzerland Calls Bitcoin a Bad Reserve Asset — A Close-Up
Key Takeaways:
- Swiss National Bank President rejects Bitcoin as a reserve asset.
- Volatility, illiquidity and security risks cited as top worries.
- Holding Bitcoin as part of its balance sheet could be an addition, but making Bitcoin a mandatory reserve asset would face significant obstacles.
As the debate rages over whether Bitcoin should be considered part of the world financial infrastructure, Bitcoin holders suffered a serious blow in their crusade to have Bitcoin accepted as a national reserve asset when Swiss National Bank (SNB) President Martin Schlegel made comments rejecting Bitcoin as part of Switzerland’s reserves. In a move centred around volatility, liquidity, and security concerns, Schlegel’s position would pose a significant barrier to the increasing push in Switzerland for a constitutional mandate of Bitcoin for inclusion in the SNB balance sheet. This contradiction is certainly indicative of those core differences over the maturity of Bitcoin and its readiness for such a central position in a national economy.
SNB chief speaks out against Bitcoin as a currency reserve

The head of the Swiss National Bank, Martin Schlegel, has spoken out against the purchase of Bitcoin demanded by an initiative. For the National Bank, cryptocurrencies have several problems as an asset class. pic.twitter.com/eNjT8HW09w— Bitcoin Initiative
(@initiativeBTC) March 1, 2025
(@initiativeBTC) Volatility Conundrum: Will Bitcoin Ever Be Fundamentally Stable?
Schlegel’s strongest argument against bitcoin is its inherent volatility. Central banks need reserve assets that retain value over long time horizons, so as to provide a stable base for economic policy. Bitcoin’s price, however, is famously volatile, making it a poor candidate for such a role, at least in Schlegel’s view.
Swiss National Bank (SNB) president Martin Schlegel
There are many stories of huge price spikes in the history of Bitcoin. For instance, Bitcoin’s price soared from below $1,000 to almost $20,000 in 2017 and then fell back down to about $3,000 during the subsequent year. More recently, external factors like Elon Musk’s tweets in 2021, where he changed Tesla’s stance on accepting Bitcoin due to environmental concerns, triggered significant price drops. This erratic behavior stands in stark contrast to the stability usually associated with a reserve asset, such as gold or government bonds. This volatility is particularly daunting for a central bank, which is tasked with conducting monetary policy. Suppose you are the head of the SNB responsible for stabilizing the Swiss Franc. But if a large part of its reserves are in Bitcoin and the price crashes, this will greatly constrain its ability to intervene successfully and may even contribute to deepening the crisis. The question is then, can Bitcoin ever really grow up enough to provide a level of stability acceptable to the SNB?
Bitcoin liquidity concerns: Could you convert Bitcoin in a crisis?
Schlegel also raised concerns about liquidity, beyond price volatility. In order for a central bank to implement monetary policy, its reserves need to be readily convertible into other assets or currencies. He wondered if Bitcoin has enough liquidity to fulfill these important demands.
Suppose that Switzerland suffers an unanticipated negative shock to its economy and the SNB decides to intervene in the foreign exchange market to defend the Swiss franc. For that, the SNB would have to rapidly sell some of its reserves and buy Swiss francs. Is there enough Bitcoin to be quickly sold by the SNB without significantly lowering the price? The Bitcoin market, while growing, is still relatively small compared to traditional currency markets. A large amount of Bitcoin sell-off could saturate the market, triggering the prices to fall and reducing the SNB’s capability to participate effectively. This is a major obstacle that Bitcoin needs to surmount before central banks can realistically think about holding Bitcoin as a reserve asset.
The Invisible Menace: Software Vulnerabilities
The digital nature of Bitcoin introduces an inherent security risk that is absent in traditional assets. As Schlegel aptly noted, “We all know that software can have bugs and other weak points.” This fundamental weakness renders Bitcoin vulnerable to attacks such as hacking and theft, as well as other technical exploits.
The crypto industry has suffered from a series of security incidents. The notorious Mt. Gox, once the largest Bitcoin exchange, collapsed spectacularly after a massive hack that saw hundreds of millions of dollars’ worth of Bitcoin stolen. In recent times, decentralized finance (DeFi) platforms have emerged as major targets for hackers, with several attacks leading to the stolen millions worth of cryptocurrencies. These incidents highlight the omnipresent risk of software vulnerabilities and the challenges faced by both individual and institutional digital asset holders — securing their digital assets. These security risks are a significant concern for a bank that is entrusted with public money, which means the need for strong security protocols and constant vigilance.
A “Niche Phenomenon” Within a Global Economy
Many people operate under the impression that the cryptocurrency industry already constitutes a distinct economic sector or organization in its own right, but, Schlegel argues that when set with respect to the entirety of the global financial system, the cryptocurrency phenomenon is quite niche. The cryptocurrency market is valued in the trillions, but it remains a tiny sliver of total global financial assets. It is this perception that is one of the main contributors to the SNB’s cautious approach to Bitcoin.
For the most part, the central bank likely believes that the upside of integrating Bitcoin into its reserves is minimal to none, considering its small size and impact on the global economy today. In other words, the SNB is perhaps wondering whether the reward is worth the risk.
Bitcoin Lawsuit in Switzerland Hits a Snag
Schlegel’s strong stance is particularly influential, especially considering Switzerland’s ongoing efforts to promote Bitcoin adoption.
More News: Switzerland’s Crypto Valley Achieved a Valuation of $593 Billion With 17 Unicorns in 2024
A citizens’ initiative led by the 2B4CH think tank is working to enshrine similar requirements in the Swiss constitution, requiring the SNB to also hold Bitcoin in its reserves alongside gold.
The proponents need to gather 100,000 signatures by June 30, 2026 to force a nationwide referendum on this proposal. For a country of Switzerland’s size — roughly 9 million people — this means winning the support of about 1.1 percent of the population. Given Schlegel’s strong opposition and the natural challenge of obtaining such broad support, the effort has an uphill battle. The very nature of a referendum means any campaign must be built on education and trust—areas where Bitcoin may still be lacking.
International Factor: Other Countries Sitting on Bitcoin Stocks
As Switzerland debates whether to even allow Bitcoin to be integrated into the bank system, other nations are doing far more than discussing what options are at their disposal. Since September 2021, under President Nayib Bukele, El Salvador has steadily added Bitcoin to its treasury while making it legal tender. But this bold experiment has raised eyebrows among international institutions: the International Monetary Fund (IMF) has openly expressed concern about financial stability and transparency.
Discussions on Bitcoin reserves are also taking place in the USA, the Czech Republic, and Hong Kong, which shows a growing interest in exploring Bitcoin’s future position in national economies. Poland’s recent dismissal of the proposal further highlights the split opinions on the matter, and suggests that the world is yet to reach a consensus on the viability of Bitcoin as a reserve asset.
More News: Utah on the Verge of Senate Approval for Bitcoin as Reserve Asset
More News: Crypto Reserve Status Draws Closer for Arizona on Senate Confirmations
UTAH BITCOIN RESERVE BILL ADVANCES IN SENATE COMMITTEE
The Utah Bitcoin Reserve Bill has made its way through the Senate Revenue and Taxation Committee, bringing the state closer to holding Bitcoin in its official reserve fund.
If passed, this could mark a significant step in… pic.twitter.com/epiK4U0wP0
— Crypto Town Hall (@Crypto_TownHall) February 20, 2025
The Swiss Franc: A Bastion of Stability Amidst the Crypto Revolution
While cryptocurrencies are poised for significant growth in the financial services sector, Schlegel remains confident in the enduring strength of the Swiss franc, asserting that the SNB is “not afraid of competition from cryptocurrencies.” The Swiss franc is a well-established safe-haven currency, known for its stability and strength, especially during periods of economic uncertainty.
This time-honored reputation strengthens the SNB’s trust in the resilience of the franc against challengers such as Bitcoin. Centuries of trust by investors cannot be built overnight. In uncertain times the Swiss Franc is a safe haven for many, which is one less reason the SNB is confident in its future.
This view signifies a minimalistic and pragmatic stance on how to successfully assimilate Bitcoin into the conventional financial network. Indeed, his concerns about volatility, liquidity, and security point to the formidable hurdles that Bitcoin needs to surmount if it is to achieve widespread acceptance as a proper reserve asset. The debate in Switzerland reflects this complex and evolving relationship between the world of cryptocurrencies and central banks, as well as how this dynamic will affect the future of the global financial system. The SNB acknowledges new technology but emphasizes that traditional principles of financial stability and risk management remain paramount for central banks worldwide.
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