The head of the Central Bank of Switzerland is reportedly skeptical about holding Bitcoin (BTC) as a reserve asset.
According to a new report from SwissInfo, Swiss National Bank (SNB) President Martin Schlegel is against using BTC as a reserve asset, namely because of volatility, liquidity and security.
Schlegel says that digital assets don’t meet the requirements that solid currencies should have. He believes that crypto assets are too volatile to be favorable for long-term investments and too illiquid to be in the bank’s reserves.
He also questions the security of the blockchains underpinning crypto assets, saying that they could run into bugs or have “weak points.”
The proposal for Switzerland to hold Bitcoin as a reserve asset was first introduced last December. The initiative, titled “For a financially strong, sovereign and responsible Switzerland (Bitcoin Initiative)” called for the SNB to build currency reserves from its earnings with BTC and gold.
Schlegel goes on to say that the SNB believes the digital asset industry is still an under-the-radar phenomenon in the grand scheme of things, pointing toward its relatively small $3.08 trillion market cap.
The executive goes on to note that the Swiss franc – which the SNB is tasked with protecting – is doing well relative to other currencies and thus, the bank is “not afraid of competition from cryptocurrencies.”
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