On May 8, 2026, a grassroots initiative aimed at urging the Swiss National Bank to include Bitcoin in its foreign exchange reserves was officially discontinued. Over an 18-month collection period, organizers gathered only about 50,000 signatures—far short of the 100,000 required by Swiss law to trigger a referendum. The highly anticipated "Bitcoin Reserve Referendum" thus came to an end. However, Switzerland’s setback is not unique—from Europe to Asia, central banks worldwide share a remarkably consistent stance on Bitcoin reserves. Is Bitcoin facing insurmountable institutional barriers, or is there a fundamental disconnect between sovereign decision-making and market expectations?
Why Does the Swiss Central Bank Firmly Reject Bitcoin as a Reserve Asset?
The Swiss National Bank maintained its opposition throughout the process. In April 2025, SNB President Martin Schlegel explicitly stated that Bitcoin’s "volatility is too high," making it incompatible with the nation’s reserve policy. According to the SNB, reserve assets must meet three criteria: stable value, ample liquidity, and the ability to support flexible expansion or contraction of the balance sheet as needed. After Bitcoin’s price dropped 6.4% in 2025 and shrank another 7.5% in 2026, two consecutive years of negative returns further reinforced the central bank’s assessment.
What’s more, the SNB’s rejection isn’t just about a single asset—it’s a categorical denial of an entire asset class. The bank made it clear that all cryptocurrencies fail to meet the requirements for foreign exchange reserves. This institutional stance is far more fundamental than the market’s interpretation of "wait-and-see."
What Structural Barriers Did the Grassroots Bitcoin Reserve Initiative Face?
Switzerland’s initiative followed a unique path. The proposal sought to amend the constitution, mandating the central bank to allocate Bitcoin alongside gold and foreign currencies. This approach drew market attention precisely because Switzerland’s direct democracy is exceptional worldwide—in theory, the public can bypass central bank decisions through constitutional amendments.
Yet after 18 months, only about half the required signatures were collected. Initiative founder Yves Bennaim admitted, "The chances were slim from the start." The effectiveness of different approaches is evident here: El Salvador purchased Bitcoin directly through presidential authority, the US government passively holds over 200,000 Bitcoins via criminal forfeiture, while Switzerland’s attempt to force the central bank through constitutional means ran into massive institutional inertia.
Why Are Central Banks Worldwide So Consistent in Their Stance on Bitcoin Reserves?
Expanding the view to major central banks and monetary authorities globally reveals a highly consistent pattern. The European Central Bank insists reserve assets must be "highly liquid and safe." In December 2025, China’s central bank identified four major obstacles to including Bitcoin as a reserve asset: severe price volatility, insufficient liquidity, information security and custody risks, and an immature regulatory framework. The Federal Reserve has yet to participate in any US strategic Bitcoin reserve plan.
This cross-regional consistency shows that central banks’ attitudes toward Bitcoin are not political, but rooted in the core function of reserve assets—maintaining economic and financial stability during crises. While Bitcoin boasts the highest liquidity among crypto assets, it still lags far behind traditional reserve assets (especially US Treasuries) by orders of magnitude.
What Governance and Financial Constraints Do Sovereign Wealth Funds Face When Allocating Bitcoin?
Sovereign wealth funds differ from central bank reserves, but face similar core constraints when considering Bitcoin allocations. An empirical study covering 2015 to 2024 found that Bitcoin’s extreme volatility makes it unsuitable as a strategic asset at the sovereign level.
That doesn’t mean sovereign capital ignores Bitcoin entirely. Reports show that some sovereign wealth funds have continued to buy Bitcoin as its price fell below $120,000, $100,000, and even $80,000, adopting a "gradual accumulation" strategy. These seemingly contradictory behaviors highlight a key logic: sovereign entities prefer indirect exposure to Bitcoin via regulated ETF products, rather than directly including it in official reserves.
As of May 11, 2026, Bitcoin was quoted at roughly $79,600 on Gate. Compared to the October 2025 all-time high of about $126,000, the drawdown exceeds 36%. For institutions pursuing long-term allocation strategies, such price retracements may present entry opportunities. However, for central bank reserve managers focused on preserving value, this level of volatility represents an unacceptable risk exposure.
How Is the US Approach to Strategic Bitcoin Reserves Fundamentally Different from Switzerland’s?
While Switzerland’s initiative failed, discussions around US strategic Bitcoin reserves are accelerating. In March 2025, Executive Order No. 14233 established a framework for strategic Bitcoin reserves. White House crypto advisor Patrick Witt announced in April 2026 that a "major update" on reserve progress would be released in the coming weeks.
The essential difference between the US and Swiss approaches lies in asset source and acquisition method. The US government’s current holding of approximately 328,372 Bitcoins comes entirely from criminal forfeiture, not open market purchases. This means the reserve buildup doesn’t require budget allocations or test the central bank’s tolerance for volatility. In contrast, Switzerland’s proposal sought to mandate proactive purchases by the central bank—fundamentally different in legal character and policy feasibility.
Additionally, legislative proposals like the BITCOIN Act set a goal to acquire 1 million Bitcoins within five years using a "budget-neutral" strategy—funding purchases by reallocating existing gold or foreign exchange reserves, without increasing fiscal burden. However, executive orders lack lasting legal force; the next administration can revoke them at any time. Only legislation can establish a permanent national reserve framework.
What Is the Deeper Logic Behind Collective Caution from Central Banks in China and Europe?
The collective refusal by central banks in China and Europe to include Bitcoin reserves stems from the fundamental logic of reserve management. The primary mission of central bank reserves is not to seek returns, but to ensure payment and intervention capacity during financial crises, geopolitical conflicts, or extreme market conditions. Bitcoin, as a decentralized asset without sovereign credit, has theoretical value for diversification, but its 24/7 trading and limited liquidity depth actually increase operational complexity in crisis situations.
Crucially, central bank reserve management follows a "capital preservation first" principle. Any asset included in reserves must have an extremely low probability of value loss. Bitcoin’s drawdown from the October 2025 peak to May 2026 is about 37%. If a sovereign entity established positions near the peak, it could face tens of billions in unrealized losses. This volatility, even if mitigated by rebalancing in a long-term allocation framework, remains a daunting political and institutional barrier for central banks subject to annual fiscal audits.
Conclusion
The failure of Switzerland’s Bitcoin reserve initiative highlights deep tensions between grassroots proposals and sovereign asset allocation logic. Supporters see de-dollarization, diversification, and innovation, while central banks focus on volatility management, accounting rules, custody security, and legal frameworks. These perspectives aren’t fully opposed, but their intersection requires time and institutional development.
Whether sovereign Bitcoin reserves will become reality depends not on the intensity of enthusiasm, but on Bitcoin’s progress in four areas: price stability, liquidity depth, regulatory clarity, and custody security. Capital markets have already incorporated Bitcoin into strategic portfolios, while sovereign institutions remain in observation and testing phases. The true turning point may arrive when an irreversible institutional framework—not just a new price high—is formally established.
Frequently Asked Questions (FAQ)
Q: Does the failure of Switzerland’s Bitcoin reserve initiative mean the country will never adopt Bitcoin?
A: Not necessarily. Initiative founder Yves Bennaim has stated that similar proposals could be launched again in the future. However, as the most representative attempt by a developed nation to include Bitcoin in reserves, this setback significantly reduces the likelihood of institutional progress in the short term.
Q: Are sovereign wealth funds suitable for Bitcoin allocation?
A: From a risk-return perspective, Bitcoin can serve as a non-core strategic allocation for sovereign wealth funds, helping to hedge against currency dilution. However, this requires a strict rebalancing mechanism, keeping positions between 0.5% and 2% of total assets. For central bank reserves whose primary function is value preservation, Bitcoin remains unsuitable for formal inclusion at this stage.
Q: If central banks worldwide collectively refuse Bitcoin, will its long-term value be affected?
A: Central bank reserves are not the main driver of Bitcoin’s price. As of May 2026, Bitcoin’s primary demand still comes from spot ETFs, institutional allocations, and on-chain holders—not sovereign purchases. Central bank refusal impacts the "national adoption" narrative more than Bitcoin’s overall asset logic.
