The Swiss Central Bank (SNB) announced that crypto assets preferred not to be in their portfolios due to their risks on liquidity and price fluctuations. Bank officials, in times of crisis, these risks may become more evident by expressing statements about their decisions.
Switzerland Central Bank and Crypto Money
SNB President Martin Schlegel, in his speech at the general assembly meeting, in the case of crypto assets in the case of market liquidity from time to time, although it may seem sufficient in crisis should be questioned, he added.
Martin Schlegel: “The high price fluctuation found in the natural structure of crypto assets is risky in terms of long -term value storing. Therefore, we think that it does not fit our reserves under current conditions.”
In addition, research published by Bitcoin supporters suggested that the addition of a small amount of crypto assets to the Swiss Treasury could complete the portfolio and that returns may increase significantly. According to the simulation results applied, the presence of 1 %crypto assets in the portfolio could provide much higher returns than the previous period.
International Approaches
Luzius Meisser, one of Bitcoin defenders, said crypto assets are resistant to market conditions and that liquidity remains alive throughout the day due to high trading volume.
Luzius Meisser: “The price of Bitcoin has reached new peaks, maintains its resistance to market stress and the system stands out as one of the most reliable infrastructure infrastructure.”
While the European Central Bank President Christine Lagarde criticized crypto assets, he said that they were not far from the risks of adequate liquidity, security and crime. In addition, the central banks of some countries made similar evaluations, while the central banks of Poland and Romania drew attention to the relevant legal regulations.
In the United States, the Central Bank President Jerome Powell stated that crypto assets were not included in accordance with the current legislation, but this year, the US President announced that steps were taken to create a strategic crypto asset reserve.
Although there is no direct crypto assets in the SNB’s portfolio, there is indirect exposure over the stocks of the relevant companies. The Bank carries out a digital currency pilot project in order to ensure ease of payment between financial institutions by closely following technological developments.
General evaluations suggest that crypto assets take a cautious attitude against the risks carried by the high return potential. This decision of the Swiss Central Bank is carefully monitored in an environment where financial policies are discussed at the international level.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
