Bitcoin remains ‘niche phenomenon,’ Swiss central bank says

Despite the substantial growth of crypto prices in recent years, Switzerland remains wary of virtual currencies, said Swiss National Bank Chairman Martin Schlegel.

The Swiss National Bank remains cautious about crypto as Chairman Martin Schlegel stressed on Thursday, Nov. 7, that physical cash would continue to play a key role in the country’s payment landscape, Reuters reports.

While cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have grown “enormously in recent years,” they still remain a “niche phenomenon,” Schlegel said. While he refrained from forecasting the future of the crypto market in Switzerland, Schlegel referred to their notorious volatility, which he argued limits their practicality for everyday transactions.

Additionally, Schlegel raised concerns about the energy-intensive nature of cryptocurrencies, along with their ties to illicit activities, which he said make them challenging to regulate.

Nonetheless, the Swiss National Bank is not going to ignore technological advances, Schlegel said, highlighting a pilot project exploring central bank digital currency to streamline interbank payments. Although the country is exploring the use of state-run digital cash, Schlegel reiterated the SNB’s commitment to cash.

“Despite the digitalization of the electronic payment system, we believe that cash will play an important role in the future.”

Martin Schlegel

In April, then-Chairman of the Swiss National Bank Thomas Jordan said Switzerland is unlikely to introduce a public CBDC in the near future, as risks associated with the technology still outweigh potential benefit. He particularly noted there are many efficient and innovative payment solutions already available to consumers and businesses through the private sector, adding that a retail CBDC could significantly reshape the existing monetary framework.