The Swiss National Bank (SNB) Chairman Thomas Jordan explained that the bank isn’t currently interested in holding bitcoin, but could move quickly to do so at some point.
“Buying bitcoin is not a problem for us, we can do that either directly or can buy investment products which are based on bitcoin,” Jordan said in response to a question at the SNB’s annual meeting. “We can arrange the technical and operative conditions relatively quickly, when we are convinced we must have bitcoin in our balance sheet.”
However, he added, “We do not believe bitcoin meets the requirements of currency reserves.”
According to an annual report published in March, the SNB’s reserves as of Dec. 31, 2021 footed to just over CHF1 trillion ($1.03 trillion). The U.S. dollar accounts for 39% of reserves, the euro 37%, Japan’s yen 8%, and the U.K.’s pound 6%. Gold holdings were just shy of CHF56 billion, or less than 6% of reserves.
The SNB is not the only central bank holding off on buying bitcoin. Earlier this month, Bank of England Governor Andrew Bailey said that the bank has no plans to invest in cryptocurrencies. Still, both he and Jordan have suggested that central banks could one day issue their own digital currencies.
In the meantime, Jordan said that Switzerland is a “crypto nation” for its burgeoning crypto industry and take steps to support FinTech growth. The country has also begun working on how it will regulate cryptocurrencies in the future — and how it can tax them.
“[This could] enable us to take into account market developments from an international perspective,” he said of cryptocurrency regulation.
Jordan added that the SNB’s position on bitcoin was neutral: “For us, bitcoin and other cryptocurrencies are not money,” he said, adding that central banks could issue digital currencies at some point as long as they don’t solvency risk or threaten financial stability. A number of central banks are looking into using blockchain technology more broadly in payments systems and other operations.
The chairman also said the central bank could buy or sell cryptocurrencies to meet monetary policy needs if it were needed, but that this was not currently in its interest. This is notable because Jordan declined to comment on whether the SNB already has such holdings — which would mean they are already included in Switzerland’s gold reserves.
The Bitcoin price took a dip following his comments and remained volatile into early afternoon trading. It fell over 4 percent at one point, with each bitcoin worth $ 5,961 around 13:00 CET Friday morning after hitting an intra-day high of $ 6,146 earlier on in the day.”