It has long been clear to aficionados that crytptocurrencies are a new asset class belonging in portfolios as an inflation hedge. The Swiss National Bank can benefit from this, an industry expert explains.
The Swiss National Bank has a number of extremely large investments in equities and other instruments, which it has used to counter the strength of an over-valued Swiss franc. In recent years, the SNB has made profits in the billions, but large exposures can also lead to substantial losses, due to rising inflation and higher interest rates taking the steam out of stock markets.
While the bank has substantial foreign currency holdings which it invests as a passive investor, cryptocurrencies are not currently one of its investment vehicles. Still, there is a great deal of interest in the bank over blockchain and digital currency developments.
Bitcoin Suisse chair Luzius Meisser, along with thirty other shareholders of the SNB, have requested the central bank invest in Bitcoin, according to an interview in Netzwoche.
The euro is Switzerland’s main trading currency, and high inflation in the eurozone is contributing to the destruction of value. Investing in cryptocurrencies can contribute to price stability while strengthening Switzerland’s political independence, Meisser said in the interview.