A group of campaigners in Switzerland announced that they will fail their constitutional amendment initiative to ensure that the Swiss National Bank (SNB), the country’s central bank, holds bitcoin in its reserves. The campaign fell short of about half of the 100,000 signatures needed to hold a national referendum.
Goal and process of the campaign
The initiative aimed to amend the Swiss Constitution and allow the SNB to hold bitcoin as well as gold in its currency reserves. Campaigners wanted this change to be put to a referendum under the country’s direct democracy system. Therefore, for the initiative to be successful, at least 100 thousand signatures had to be collected in a period of 18 months.
The Swiss Federal Chancellery recorded this proposal as a constitutional amendment. The proposal called for a portion of the SNB’s reserves to be compulsorily held in both gold and bitcoin. However, a clear ratio was not specified in the proposal text as to how much of the reserves would consist of these assets.
The basis of the initiative and the justifications defended
Within the scope of the campaign, bitcoin was defined as a neutral and independent alternative to traditional financial assets. It was also argued that bitcoin would be a form of insurance and balance to reduce risks against the SNB’s reserves in foreign currencies such as the dollar and euro. According to Reuters, approximately three-quarters of the Swiss National Bank’s foreign exchange reserves are US dollar and euro assets.
Although those who supported the campaign highlighted the potential of bitcoin, it could not find the necessary response from the public. In the referendum system based on direct democracy, the team running the initiative announced that they would terminate the process after 100 thousand signatures could not be collected.
Central bank’s approach
In its statements on the subject last year, the Swiss National Bank took a clear stance against holding bitcoin in its reserves. Bank managers expressed the opinion that bitcoin was not suitable as a reserve asset, citing the volatility and liquidity problems of crypto assets in the markets.
Previously, this approach of the central bank was seen as an obstacle to the work of the initiative committee. The bank had long remained determined to maintain its traditional monetary policies based on gold and foreign exchange reserves.
While campaigners argued that bitcoin should be used as a neutral hedge of value in the SNB’s reserves, this demand did not find sufficient support in the public and political arena.
Although cryptocurrencies are widely used in Switzerland, this development shows that a radical transformation in the central bank’s reserve policies is not possible for now. Although the initiative did not find sufficient support, the Swiss National Bank is expected to continue its current reserve strategy.
