No, cryptocurrency cannot be counted as a reserve currency, said the Swiss bank for bitcoin even though trading it in Switzerland is not a problem. Operative and technical conditions would be arranged soon.
The official statement reveals bitcoin is currently unable to meet the requirements and this is the reason it is not being considered as a legal trader now. One of the failed requirements is the CO2 emissions, which the segment generates in a great volume and which is equivalent to the domestic emissions of Switzerland.
Billions of dollars are being invested by the Swiss bank in the fossil fuel industry. It has foreign currency investments of about $937 billion, which is about 10 percent holding in fossil fuel companies. Lately, the bank has reduced its share to around 4 percent in the sector and is restricting investment in companies that are involved in coal mining.
A reserve currency is basically held in a large amount by the central banks of countries to use it for international transactions. It helps in reducing the exchange rate risk.
El Salvador announced last year to consider bitcoin as a legal tender. The Central African Republic lately adopted the digital currency as its national currency believing it would help the country financially and help improve the living standard of the people. Panama lately passed a bill to facilitate crypto assets trading in the country. Cuba legalized crypto-related mobile applications to ease international payment methods. The country is under the sanction of the US for years and its banks are not listed in the international payment systems.
The world of cryptocurrency is just about a decade old. Bitcoin is the first cryptocurrency and was launched in 2009. The segment is based on blockchain technology. It is decentralized and not under the direct control of any government, bank or authority. The transactions are anonymous and recorded in a digital public ledger.