Bitcoin can restore Swiss neutrality, says activist calling on central bank to invest in cryptocurrency

By Louis Goss

A self-proclaimed internet pioneer, who is seeking to trigger a referendum in Switzerland that could force the country's central bank to invest in bitcoin, has said his campaign is about more than just cryptocurrency.

The campaign is seeking to amend Switzerland's constitution, to include a clause saying the Swiss National Bank must hold part of its reserves in bitcoin (BTCUSD), by collecting the 100,000 Swiss registered signatures that are required to put the issue to a popular vote.

In an interview with MarketWatch, Yves Bennaïm acknowledged "there is a fair chance, knowing that Swiss people don't like change and that bitcoin is misunderstood, that we won't get the 50% vote required to change the constitution."

The cryptocurrency expert, however, explained that his campaign is instead seeking to start a wider debate about Switzerland's national sovereignty, the country's investments in foreign "war bonds," and about how the Swiss National Bank works.

He argued that the SNB's investments in foreign government bonds and Nasdaq-listed COMP tech giants have undermined Switzerland's long-standing policy of neutrality and made the country reliant on the economies of countries including Germany and the U.S.

"At the moment the Swiss National Bank does whatever it wants and it's supporting war and it's supporting fossil fuels, all while making record losses," he said. "Something needs to give."

"The moment you start saying why doesn't the SNB have bitcoin in their reserves, you ask the question: 'Well what do they have in their reserves?'"Yves Bennaïm

Through Switzerland's unique form of direct democracy, previous referendums have seen voters polled on whether the country should abolish its army, cap immigration, or give all Swiss residents an "unconditional basic income" of 2,500 Swiss francs a month.

Currently, clause 99 of Switzerland's constitution says: "The Swiss National Bank shall create sufficient currency reserves from its revenues; part of these reserves shall be held in gold." The campaign is calling for the clause to be amended to refer to "gold and bitcoin" instead.

As of the end of 2023, the SNB (CH:SNBN) held 7% of its 795 billion Swiss francs ($873 billion) worth of reserves in gold, with the remaining 93% held in the form of government bonds and publicly listed stocks. The central bank made a 3.2 billion Swiss franc loss in 2023, its annual results show, after losing 132.5 billion francs the previous year.

"The problem with the SNB at the moment is that it has a lot of money," Bennaïm said. "It's buying all kinds of stuff in order to invest, as a store of value."

Those investments include everything from multi-billion dollar investments in the Magnificent Seven tech giants to major holdings in a raft of top pharmaceutical companies including Pfizer (PFE) and Johnson & Johnson (JNJ), cigarette seller Philip Morris (PM), and U.S. energy giants Chevron (CVX) and ExxonMobil (XOM).

In Bennaïm's view, those investments make Switzerland reliant on a war machine which he says is core to driving U.S. growth. He also argues the SNB is working to further entrench the system of fiat currencies by investing in foreign government debt.

"The whole U.S. economy is dependent on the fact that there's a never-ending war," Bennaïm said. "How is it that the Swiss economy and Swiss stability is so linked to the economy of the U.S.?"

"It's a boring conversation to be honest, but it's only once you become a bitcoiner that you become really interested in all that stuff," he said.

'Toxic bitcoin maximalist'

Born in Geneva, Switzerland, Bennaïm, who describes himself as a "toxic bitcoin maximalist," says he first became interested in cryptocurrencies in 2011.

Having previously worked as a website designer through the dot-com bubble, he later opened a shop and restaurant, which were the first to accept payments in bitcoin in the whole of Switzerland in 2013.

In 2017, he left his job to become a full-time cryptocurrency evangelist, before becoming increasingly interested in the politics behind the blockchain and its potential as a "political tool." He currently runs a bitcoin focused think-tank called 2B4CH.

Bennaïm is now optimistic that his campaign might actually get the 100,000 signatures required to hold a referendum and believes the five-year process leading up to a popular vote could shift the conversation around cryptocurrencies and around the SNB - even if the voters ultimately decide to keep the status quo.

"I would like that Switzerland questions itself," he said. "Bitcoin is the agitator. The moment you start saying why doesn't the SNB have bitcoin in their reserves, you ask the question: 'Well what do they have in their reserves?'"

Bennaïm says he now believes it is inevitable that the SNB will soon start investing in bitcoin, even if his own campaign to amend the Swiss constitution fails. "I know the SNB will be having [bitcoin] in their treasury by the end of the initiative anyway, because they're not stupid," he said.

Asked about the value of his own bitcoin holdings, Bennaïm, however, avoided giving a direct answer as he hit back at the notion that the value of his crypto assets might represent a conflict of interest.

"Whether I have one satoshi or one million bitcoin, in reality it's completely irrelevant," he said. "Even if I'm the poorest person in Switzerland, I'm part of the top 1% of the world."

And for Bennaïm, Switzerland's wealth, stability, and unique democratic model are exactly the reason its central bank should start investing in bitcoin. "We are very comfortable, we are very privileged," he said. "Switzerland can lead the way."

-Louis Goss

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04-23-24 0840ET

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