Will Swiss National Bank Buy Bitcoin?
Vice President of the Swiss National Bank (SNB) Martin Schlegel caused an uproar in the Bitcoin community with a new comment on a TV interview. Schlegel was asked to complete the sentences of the Swiss presenter who said: “I consider Bitcoin…”. And Schlegel added, “a very interesting concept.”
While this was his only statement on Bitcoin, it does provide an interesting insight into the current view of the Swiss National Bank. The statement implies that the SNB is curious about Bitcoin’s technology and potential use. However, this does not mean that it supports or opposes BTC.
Still, the statement is notable because the US Federal Reserve (Fed) or the European Central Bank (ECB) could never admit that the number one cryptocurrency is an “interesting concept”. Instead, ECB President Christine Lagarde has repeatedly referred to Bitcoin as “worthless” and a “speculative investment with no intrinsic value.”
Could the Swiss National Bank invest in Bitcoin?
Notably, Vice President Schlegel’s comment is not the Swiss National Bank’s first comment on BTC. SNB head Thomas Jordan expressed his opinion on the possible addition of Bitcoin to the central bank’s foreign reserves during the April 2022 General Assembly of the SNB.
This was preceded by two open letters from financial services firm Bitcoin Suisse, both promoting an investment in the cryptocurrency. The company called for the creation of a structure “to be able to acquire and hold Bitcoin for monetary and exchange rate purposes, if necessary.”
SNB head Thomas Jordan responded to this proposal at the General Assembly. As Reuters reported at the time, Jordan explained that BTC currently does not meet foreign reserve requirements. Therefore, he said, the SNB has decided not to keep BTC on its balance sheet.
However, Jordan also noted the prospect that the SNB could act quickly should that assessment change. “We can organize the technical and operational conditions relatively quickly, when we are convinced that we must have Bitcoin on our balance sheet,” said the SNB chairman.
Therefore, there does not seem to be a technical obstacle to buying BTC. “Buying Bitcoin is not a problem for us, we can do it directly or buy Bitcoin-based investment products,” Jordan reiterated.
The Swiss National Bank is Different
Unlike its American and European counterparts, the Swiss National Bank cannot use accounting gimmicks to embellish its balance sheet. The SNB is constituted as a joint-stock company and therefore reports according to the appropriate rules.
This means that the SNB cannot hide its losses by valuing the government bonds it holds at cost rather than the market price. What this means was demonstrated in March 2023 when the SNB filed its annual financial statements.
As reported by NZZ, the Swiss National Bank has lost around two-thirds of its equity. The annual loss of 132.5 billion francs reduced the SNB’s assets by two-thirds, from 204.2 billion francs ($225.97 billion) to 65.8 billion francs ($72.81 billion).
At press time, the BTC price was at $27,918. With today’s release of the US unemployment rate, BTC could be in for a volatile Friday.
Featured image from Forbes, chart from TradingView.com