Bitcoin remains ‘niche phenomenon,’ Swiss central bank says

Swiss National Bank Governor Martin Schlegel said that despite the significant increase in crypto prices in recent years, Switzerland remains cautious towards virtual currencies.

The Swiss National Bank remains cautious on crypto after Governor Martin Schlegel emphasized on Thursday, November 7, that physical cash will continue to play an important role in the country’s payments environment, Reuters reports.

Although cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) have grown “tremendously in recent years,” they still remain a “niche phenomenon,” Schlegel said. While Schlegel refrained from predicting the future of the crypto market in Switzerland, he cited the notorious volatility, which he argued limits their viability for day-to-day transactions.

Additionally, Schlegel expressed concerns about the energy-intensive nature of cryptocurrencies and their ties to illegal activities, saying they make them difficult to regulate.

Still, the Swiss National Bank will not ignore technological advances, Schlegel said, drawing attention to a pilot project investigating a central bank digital currency to facilitate interbank payments. Although the country is exploring the use of state-run digital cash, Schlegel reiterated the SNB’s commitment to cash.

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

Martin Schlegel

In April, then-President of the Swiss National Bank, Thomas Jordan, said Switzerland was unlikely to introduce a public CBDC in the near future because the risks associated with the technology still outweigh the potential benefit. In particular, he noted that there are many efficient and innovative payment solutions already offered to consumers and businesses through the private sector, adding that retail CBDC could significantly reshape the current monetary framework.