Why did the Swiss Bitcoin Reserve Initiative Fail? The Governance Logic Behind the Central Bank's Veto

On May 8, 2026, a public initiative aimed at encouraging the Swiss National Bank to include Bitcoin in its foreign exchange reserves was officially announced to be terminated. During the 18-month collection period, the initiative organizers collected only about 50,000 signatures—far short of the 100,000 referendum threshold required by Swiss law. This much-anticipated “Bitcoin Reserve Referendum” has thus come to an end. However, Switzerland’s failure is not an isolated case—across Europe and Asia, central banks around the world hold highly consistent positions on Bitcoin reserves. Is Bitcoin encountering an insurmountable obstacle at the institutional level, or is there a fundamental misalignment between the reasoning of sovereign authorities and market expectations?

Why is the Swiss central bank firmly refusing to let Bitcoin enter reserve assets?

The Swiss National Bank’s opposition stance runs through the entire event. In April 2025, Swiss National Bank chair Martin Schlegel explicitly stated that Bitcoin is “too volatile” and does not fit the country’s reserve policy. In the Swiss National Bank’s view, reserve assets must simultaneously meet three conditions: maintaining stable value, having sufficient liquidity, and supporting flexible expansion or contraction of the balance sheet as needed. After Bitcoin’s price fell 6.4% in 2025, it shrank another 7.5% in 2026. The performance of two consecutive years of negative returns further strengthened the central bank’s judgment.

More importantly, the Swiss National Bank’s refusal is not an attitude toward a single asset, but a blanket rejection of an asset class. The Swiss National Bank has explicitly stated that all cryptocurrencies fail to meet foreign exchange reserve requirements. This institutional rejection is far more fundamental than the market’s understanding of “temporary observation.”

What structural obstacles did the grassroots Bitcoin reserve initiative face?

The initiative route in Switzerland is itself distinctive. The proposal attempted to amend the constitution to force the central bank to allocate Bitcoin alongside gold and foreign exchange. This approach drew market attention precisely because Switzerland’s direct democracy system stands out globally—at least in theory, the public can bypass central bank decision-making through constitutional amendments.

However, during the 18-month collection period, it only obtained about half of the required signatures. The initiative’s founder, Yves Bennaim, candidly admitted that “hopes were bleak from the start.” The differing effectiveness of various paths is clearly illustrated here: El Salvador purchased Bitcoin directly through presidential executive authority; the United States passively holds more than 200,000 Bitcoin through criminal confiscation procedures; while Switzerland tried to force the central bank to allocate Bitcoin through constitutional means, only to run into enormous resistance from institutional inertia.

Why do central banks worldwide show a highly consistent stance on Bitcoin reserves?

Expanding the perspective from Switzerland to major global central banks and monetary authorities reveals a highly consistent pattern. The European Central Bank insists that reserve assets must be “highly liquid, safe, and reliable.” In December 2025, China’s central bank explicitly proposed that including Bitcoin in reserve assets faces four major obstacles: extreme price volatility, insufficient liquidity, information security and custody risks, and an immature regulatory framework. The Federal Reserve has not yet participated in the United States’ strategic Bitcoin reserve plan.

This cross-regional consistency indicates that central banks’ attitudes toward Bitcoin are not driven by political positions, but by professional judgments centered on the core functions of reserve assets—maintaining economic and financial stability during crises. While Bitcoin’s liquidity ranks first among crypto assets, compared with traditional reserve assets—especially U.S. Treasuries—it still lags by orders of magnitude in quantity.

What governance and financial constraints do sovereign wealth funds face when allocating Bitcoin?

Although sovereign wealth funds differ from central bank reserves, they face similar core constraints when allocating Bitcoin. An empirical study covering 2015 to 2024 found that due to Bitcoin’s extreme volatility, it is not suitable as a sovereign-level strategic asset.

But this does not mean sovereign capital completely ignores Bitcoin. It has been disclosed that some sovereign wealth funds continue to buy when the Bitcoin price falls below the $120,000, $100,000, and even $80,000 ranges, adopting a “gradual accumulation” strategy. These two seemingly contradictory phenomena actually reflect one key logic: sovereign institutions tend to gain indirect exposure to Bitcoin through regulated ETF products rather than directly including it in official reserve assets.

As of May 11, 2026, Bitcoin is quoted at approximately 79,600 USD on Gate.io. Compared with the historical high of about 126,000 USD in October 2025, the pullback exceeds 36%. For institutions executing long-term allocation strategies, price drawdowns may present entry windows; but for central bank reserve management departments whose primary goal is value preservation, this level of volatility is already an unacceptable risk exposure.

How is the U.S. path to a strategic Bitcoin reserve fundamentally different from Switzerland’s?

While Switzerland’s initiative failed, discussions in the United States about a strategic Bitcoin reserve are accelerating. In March 2025, Executive Order No. 14233 established the framework direction for strategic Bitcoin reserves. In April 2026, White House crypto advisor Patrick Witt publicly stated that “major announcements” on reserve progress would be released in the coming weeks.

The fundamental difference between the U.S. and Switzerland paths lies in the source of assets and the way they enter reserves. The approximately 328,372 Bitcoin currently held by the U.S. government all come from criminal confiscation procedures, not from purchases in open markets. This means building the reserve does not involve budget appropriations and does not test the central bank’s willingness to tolerate volatility. By contrast, the Swiss proposal sought to force the central bank to actively purchase Bitcoin. The two differ fundamentally in legal nature and policy feasibility.

In addition, legislative proposals such as the BITCOIN Act set a goal of buying 1 million Bitcoin within five years and adopt a “budget-neutral” strategy—raising funds by adjusting existing gold or foreign exchange reserves, without adding additional fiscal burdens. However, executive orders themselves do not have durable legal force, and the next administration has the power to revoke them at any time. Only by fixing the reserve framework through legislation can a truly permanent, national-level allocation be established.

What is the deeper logic behind the collective wait-and-see stance of central banks in Central and Europe?

The collective refusal by central banks to hold Bitcoin reserves ultimately stems from the underlying logic of reserve management. The central bank’s top mission is not to chase returns, but to ensure payment and intervention capabilities during financial crises, geopolitical conflicts, or extreme market conditions. As a decentralized asset without sovereign credit backing, Bitcoin has theoretical value for diversification and hedging; yet its 24/7 trading mechanism and limited liquidity depth instead increase operational complexity during crises.

More critically, central bank reserve management follows a “capital preservation first” principle. For any asset to be included in reserves, the likelihood of value loss must be confined to an acceptably low range. Bitcoin’s drawdown from the October 2025 high to May 2026 is about 37%. For any sovereign institution building positions near the peak, paper losses could reach several billion dollars. Even if such volatility can be mitigated in a long-term allocation framework through rebalancing, for central banks that face annual fiscal audits, it remains a political and institutional obstacle that is difficult to overcome.

Summary

The failure of the Swiss Bitcoin reserve initiative reflects deep underlying tension between grassroots ambitions for asset allocation and the priorities of sovereign institutions. Supporters see de-dollarization, reserve diversification, and innovation with inclusion; central banks, on the other hand, focus on volatility management, accounting rules, custody security, and legal frameworks. The two are not entirely opposed, but their convergence requires time and institutional development to be gradually built.

Whether a sovereign Bitcoin reserve can become reality depends less on emotional enthusiasm and more on whether Bitcoin can advance in four dimensions in parallel: price stability, liquidity depth, regulatory clarity, and custody security. Capital markets have already moved first to integrate Bitcoin into strategic planning, while sovereign institutions remain in a stage of observation and testing. The real turning point may come when an irreversible institutional design—rather than a new price high—is officially established.

Frequently Asked Questions (FAQ)

Q: Did the Swiss Bitcoin reserve initiative completely end the country’s possibility of adopting Bitcoin?

A: No, it did not completely end it. Yves Bennaim, the initiative’s founder, said that there is no exclusion of launching similar proposals again in the future. However, as the most representative attempt among developed countries to “put Bitcoin into reserves,” this failure has indeed significantly reduced the probability of institutional advancement in the near term.

Q: Are sovereign funds suitable for allocating Bitcoin?

A: From a cost-benefit model perspective, Bitcoin can be used as a non-core strategic allocation for sovereign funds to hedge against currency dilution. However, the prerequisite is to establish strict rebalancing mechanisms and keep positions between 0.5% and 2% of total assets. For central bank reserves whose primary function is value preservation, it is still not suitable to include Bitcoin as an official reserve at this stage.

Q: If central banks worldwide collectively reject Bitcoin, will Bitcoin’s long-term value be affected?

A: Central bank reserves are not the main driver of Bitcoin’s price. As of May 2026, the primary sources of demand for Bitcoin still come from spot ETFs, institutional allocations, and on-chain holders’ behavior—not sovereign purchases. Central banks’ refusal affects the “national-level adoption” narrative more than it affects Bitcoin’s overall asset logic.