Swiss Bitcoiners Renew Efforts to Force Central Bank to Hold Bitcoin
Swiss Bitcoiners are again trying to convince the Swiss National Bank to hold Bitcoin in its reserves. They believe this would benefit Switzerland’s sovereignty and neutrality. To get a referendum on the issue, they need to collect 100,000 signatures from Swiss citizens. This is the second attempt to get enough signatures after a previous effort failed in October 2021.
The Swiss National Bank currently does not hold Bitcoin in its reserves. However, a group of Swiss Bitcoiners are trying to change this by holding a referendum to change the country’s constitution. If they are successful, the Swiss National Bank would be required to hold Bitcoin in its reserves.
Swiss Bitcoiners believe that adding Bitcoin to the Swiss National Bank’s reserves would help protect the country’s “sovereignty and neutrality” in an increasingly uncertain world. They also claim that Switzerland would be $32.9 billion richer if the central bank had followed the suggestion to buy Bitcoin in 2022.
However, the Swiss National Bank Chair Thomas Jordan has said that Bitcoin doesn’t meet the requirements to be added as a reserve currency. The document does not discuss what those specific requirements are.
Also, read – The Role Of Crypto Payment Gateways In Decentralized Finance (DeFi)
Swiss Bitcoiners Advocates Revive Push for Central Bank to Hold Bitcoin
Proponents of Bitcoin in Switzerland are reportedly renewing their efforts to pressure the Swiss National Bank (SNB) into holding the cryptocurrency as part of its foreign reserves. This comes after the SNB previously expressed reservations about Bitcoin’s suitability for such a role.
The SNB, responsible for managing Switzerland’s foreign currency reserves, currently holds traditional assets like the US dollar, Euro, and Japanese Yen. However, Swiss Bitcoiners argue that Bitcoin’s unique characteristics make it a valuable addition to a central bank’s portfolio.
Arguments for a Bitcoin Reserve:
- Limited Supply and Inflation Hedge: Unlike traditional currencies, Bitcoin has a finite supply of 21 million coins. This built-in scarcity protects against inflation, a major concern for central banks.
- Decentralization and Security: Bitcoin operates on a decentralized network, meaning it’s not controlled by any single entity. This distributed ledger technology offers a high degree of security and transparency.
- Diversification and Performance: Bitcoin has exhibited significant growth over the past decade, offering potential diversification benefits for the SNB’s reserves.
Potential Risks of a Bitcoin Reserve:
- Volatility: Bitcoin’s price is known for its dramatic fluctuations, which could introduce significant instability into the SNB’s reserves.
- Regulation and Uncertainty: The regulatory landscape surrounding Bitcoin is still evolving, and its long-term viability as an asset class remains uncertain.
- Security Concerns: While the Bitcoin network itself is secure, there have been instances of hacking and theft on cryptocurrency exchanges where Bitcoin is held.
Acquiring and Storing Bitcoin:
If the SNB were to decide to acquire Bitcoin, it would likely do so through a reputable cryptocurrency exchange. The specific process would depend on the exchange’s regulations and the size of the purchase.
Storing Bitcoin presents a unique challenge for central banks. Unlike traditional assets held in vaults, Bitcoin exists on a digital ledger. The SNB would need to implement secure cold storage solutions to safeguard its Bitcoin reserves, potentially involving a combination of offline hardware wallets and multi-signature protocols.
The SNB has yet to indicate a change in its stance on Bitcoin. Central banks are known for their cautious approach, and the SNB may require further developments in the Bitcoin ecosystem, such as more robust regulations and improved security measures, before considering it a viable reserve asset.
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