Friday, December 9, 2022

Swiss National Bank Says It Has No Plans to Add Bitcoin As A Reserve Currency

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Despite the growing macroeconomic uncertainty, Bitcoin (BTC) still doesn’t have enough acceptance as the world’s reserve currency. The Swiss National Bank (SNB) has denied any plans of buying and holding BTC as the reserve currency.

During the central bank’s annual general meeting on Friday, April 29, Chairman Thomas Jordan said that they don’t have any plans to put Bitcoin on the bank’s balance sheet. Jordan added:

“Buying bitcoin is not a problem for us, we can do that either directly or can buy investment products which are based on bitcoin. We can arrange the technical and operative conditions relatively quickly, when we are convinced we must have bitcoin in our balance sheet”.

He further added that from the current perspective, Bitcoin doesn’t meet the criteria of currency reserves. Thus, they won’t be proceeding with any plan in this regard.

Bitcoin’s Growing Importance In Global Macro

Amid the global macroeconomic uncertainty, we have been seeing the U.S. slowly losing its stronghold as the world’s reserve currency. Furthermore, the current geopolitical situation is changing the dynamics of global trade bringing crypto to the forefront.

Amid current sanctions on Russia, global citizens want to have a currency free of government influence. Bitcoin becomes a natural choice for them in this case as it is free from financial boundaries. Despite Bitcoin’s multifold returns over the last decade, choosing it as a reserve currency comes with its own costs.

Bitcoin (BTC) still remains a very volatile asset class and closely follows the U.S. equity market. Thus, it has yet to prove as a true hedge in the market that can protect the investors’ wealth.

On the other hand, we have been seeing that Wall Street banking institutions have been growing their exposure to Bitcoin. Yesterday, Goldman Sachs announced offering a Bitcoin-backed loan to its clients becoming the first major U.S. bank to make this move.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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