A coalition of cryptocurrency advocates in Switzerland, led by local entrepreneurs, is on a mission. They are calling on the Swiss National Bank (SNB) to diversify its foreign reserves by adding Bitcoin (BTC). This initiative seeks to make Switzerland the first country to mandate Bitcoin holdings by a central bank through constitutional reform. Switzerland, home of the original “Crypto Valley” in Zug, is already moving. The country seeks to reorient its reserve strategy so that it can consolidate its current position as a leading global hub for blockchain technology.

75% of the SNB’s foreign currency holdings are in US dollars and euros. The advocates argue that adding Bitcoin would provide an inflation-resistant alternative to traditional fiat currencies amidst a global shift towards multipolarity.

Key Figures and Arguments

Luzius Meisser, a board member of Bitcoin Suisse, considered one of the movers and shakers behind this movement. He hopes to make the case for the initiative at the SNB’s annual general meeting in Bern, convincing stakeholders in person as much as possible.

Meisser’s argument hinges on Bitcoin’s unique monetary policy. He further contends that Bitcoin provides protection from inflation, a weakness built into fiat currencies controlled by central banks.

Yves Bennaim, creator of the Bitcoin Initiative Working Group Security and Liquidity Task Force, responds to the security and liquidity concerns. Second, he puts a great deal of weight on the robustness of the Bitcoin market as a defense.

"The global Bitcoin market is the most liquid and established among digital assets. We are not saying go all in with Bitcoin, but a small allocation can hedge against monetary and geopolitical risks." - Yves Bennaim

SNB's Reservations

SNB Chairman Martin Schlegel has previously raised concerns over the addition of Bitcoin into national reserves. He points to Bitcoin’s enormous volatility and possible technical weaknesses.

"Cryptocurrencies are essentially software. And we all know that software can often have bugs and other vulnerabilities." - Martin Schlegel

Despite these concerns, proponents like Bennaim are still bullish on Bitcoin. He contends that even 1% allocation to Bitcoin is enough to hedge effectively against monetary and geopolitical risks. They’re convinced this is the right step forward for Switzerland.

Road to Referendum

Switzerland’s Federal Chancellery has pre-approved the submission of a proposed constitutional amendment for this December. This proposal would mandate the SNB to keep a percentage of its reserves in Bitcoin.

The process steps up considerably from here, requiring 100,000 validated signatures to force a national referendum. If this initiative is successful, it would represent a major shift in how central banks hold their reserves. This move would set a powerful example for other countries to follow.