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Swiss National Bank dismisses having Bitcoin on its balance sheet

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Switzerland Swiss
Switzerland Swiss

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The Swiss Central Bank has said that it cannot hold Bitcoin as a reserve currency. The bank’s chairman has said that the institution did not plan to include Bitcoin in its balance sheet.

Bitcoin cannot be a reserve currency

The Chairman of the Swiss National Bank, Thomas Jordan, has said that the bank will not have the largest cryptocurrency by market cap, Bitcoin, in its reserve currency. However, the institution is still considering the integration of digital currencies.

The central bank held an annual general meeting on April 29, where Jordan said that the bank did not believe that Bitcoin met the requirements necessary for it to be classified as a currency reserve. However, there was still a chance that the bank could have Bitcoin on its balance sheet if they were fully convinced.

A report by Reuters quoted Jordan saying, “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.”

Switzerland is a crypto-friendly country. Switzerland is a country with the most profitable Bitcoin traders globally. A report by Invezz said that Switzerland has the highest gains per investor.

Crypto adoption in the country is also high. The country’s southern city, Lugano, announced plans for Bitcoin, Tether and LGV to be used as a legal payment method alongside the Swiss Franc. If these plans are successful, these cryptocurrencies will be used to pay public service fees and taxes.

Switzerland’s plan for a CBDC

Switzerland has been looking into CBDCs since 2019. The Switzerland National Bank announced the launch of a wholesale central bank digital currency. This CBDC will be launched in January 2023. The wCBDC will be issued through the Six Digital Exchange (SDX).

The launch of this wCBDC is yet to be officially endorsed, and it will require some policy changes for it to be implemented. It is reported that the central bank, alongside Citigroup Inc, Goldman Sachs Group Inc, UBS Group AG, Credit Suisse Group AG and Hypothekarbank Lenzburg AG, conducted a trial phase for the CBDCs.

The trial phase for this CBDC is to assess whether the CBDC can be adopted within the Swiss financial network. The trial phase was part of an experimentation project dubbed “Project Helvetica”.

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