The Vice President of the Swiss National Bank (SNB) Martin Schlegel has caused a stir in the Bitcoin community with a new remark in 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.”
Even though this was his only statement regarding Bitcoin, it gives an interesting insight into the current view of the Swiss National Bank. The statement implies that the SNB is curious about the technology and the potential use of Bitcoin. However, it does not mean that it supports or opposes BTC.
Still, the statement is notable because a US Federal Reserve (Fed) or European Central Bank (ECB) could never admit that the number one cryptocurrency is an “interesting concept.” Instead, ECB President Christine Lagarde repeatedly referred to Bitcoin as “worth nothing” and a “speculative investment with no intrinsic value.”
Could The Swiss National Bank Invest In Bitcoin?
Remarkably, Vice President Schlegel’s comment is not the Swiss National Bank’s first comment on BTC. SNB chief Thomas Jordan voiced his opinion on the possible addition of Bitcoin to the central bank’s foreign reserves during the SNB’s April 2022 General Meeting.
This was preceded by two open letters from financial services company Bitcoin Suisse, both promoting an investment in the cryptocurrency. The company called for the creation of a framework “to be able to acquire and hold Bitcoin for monetary and exchange rate purposes if needed.”
SNB chief Thomas Jordan responded to this proposal at the General Meeting. As Reuters reported at the time, Jordan explained that BTC does not currently meet the requirements for foreign reserves. 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 arrange the technical and operative conditions relatively quickly, when we are convinced we must have Bitcoin in our balance sheet,” the SNB chair said.
Thus, there does not appear to be a technical hurdle to buying BTC. “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 reiterated.
The Swiss National Bank Is Different
Unlike its American and European counterparts, the Swiss National Bank can’t use accounting tricks to embellish its balance sheet. The SNB is constituted as a joint-stock company and therefore reports in accordance with the appropriate rules.
This means that the SNB cannot hide its losses by valuing government bonds they hold at cost price rather than market price. What this means was demonstrated in March 2023, when the SNB presented its annual financial statements.
As the NZZ reported, the Swiss National Bank lost about two-thirds of its equity. The annual loss of 132.5 billion francs reduced the SNB’s equity by two-thirds, from 204.2 billion francs ($225.97 billion) to 65.8 billion francs ($72.81 billion).