The Swiss National Bank (SNB) is looking into Bitcoin reserves. Yeah, you read that right. The Swiss federal chancellery has thrown a proposal into the mix to require the SNB to hold Bitcoin as part of its monetary reserves. This is led by some big names in the crypto sphere, but it’s not all sunshine and rainbows. We’ve got some sustainability and economic questions to kick around too.
What’s the Deal?
This proposal made its debut in the Federal Gazette on December 31. The brains behind it are Giw Zanganeh, Tether’s Vice President of Energy and Mining, and Yves Bennaïm, who founded the Swiss Bitcoin nonprofit think tank 2B4CH. They want to tweak Article 99, Paragraph 3 of the Swiss Federal Constitution, so that the SNB must hold Bitcoin along with its gold reserves.
To get this ball rolling, they need 100,000 signatures by June 30, 2026, to even think about a public referendum. That's 1.12% of Switzerland's 8.92 million citizens, which is a tall order. If they pull it off, Switzerland could be one of the first countries to officially hold Bitcoin in its reserves.
A Global Trend?
Switzerland isn’t alone in this thinking. In the U.S., Senator Cynthia Lummis is backing a bill that would require Bitcoin reserves for Treasury management. Brazil and Poland are also eyeing Bitcoin reserves, and in Hong Kong, a lawmaker is suggesting they use their unique status to include Bitcoin in their national reserves.
And it’s not just governments. Corporate entities are also stacking up Bitcoin. MicroStrategy and Metaplanet are some of the well-known holders expanding their reserves. Just recently, MARA Holdings (MARA) announced the acquisition of 11,774 BTC. Riot Platforms, a Bitcoin mining firm, is raising $500 million through a private bond offering to boost its Bitcoin reserves too.
The Double-Edged Sword
But there’s a catch. The proposal has hit some bumps, particularly around Bitcoin’s energy consumption and its role as a payment method. Martin Schlegel, Chair of the SNB, has raised some eyebrows about the environmental toll of Bitcoin mining. The energy consumption is off the charts, sometimes likened to that of entire countries. Estimates peg Bitcoin's annual electricity usage at 91 to 172 terawatt-hours (TWh), comparable to Finland or Poland.
This high energy consumption is largely due to the Proof of Work (PoW) consensus mechanism. Not only does it create a huge carbon footprint, but it also relies heavily on fossil fuels, which is not ideal for sustainability. Sure, more than half of mining now uses renewables, but let’s be real, that demand is still massive.
The Bottom Line for Switzerland
What could this mean for Switzerland? If Bitcoin’s value plummets after being included in the reserves, it could be a pretty significant hit to the SNB’s credibility and the country's economic reputation. But advocates argue that Bitcoin could be a hedge against inflation and fits right in with Switzerland's innovative financial landscape.
This proposal is a bold step, placing Switzerland potentially at the helm of financial innovation. But the environmental and economic implications can't be ignored. As this conversation progresses, weighing the benefits against the risks will be paramount for Switzerland's financial stability and the planet.
