Bitcoin as State Power: From Swiss Referendum Failure to U.S. Military Nodes

Bitcoin Enters the Arena of State Power - But Not the Way Advocates Expected

Bitcoin's journey into the halls of sovereign power is accelerating, but the path is proving far more complex and unpredictable than early advocates imagined. In Switzerland, a grassroots campaign to enshrine Bitcoin in the central bank's reserve portfolio is quietly dying for lack of popular support. Meanwhile, half a world away, a senior U.S. military commander is publicly disclosing that his command runs a Bitcoin node and calling the protocol a tool of "power projection." These two stories, on the surface unrelated, together paint a revealing portrait of how states are actually engaging with Bitcoin in 2025 and 2026 - on their own strategic terms, not on the terms of Bitcoin advocates.

The emerging picture is neither the libertarian utopia nor the regulatory nightmare that polarizes so much Bitcoin commentary. It is something more interesting: a technology that was designed to exist outside the state finding itself pulled, in contradictory directions, into the very structures it was meant to circumvent.

The Facts

In Switzerland, the "Bitcoin Initiative" - formally approved for circulation in late 2024 - set out to amend the Swiss constitution to compel the Swiss National Bank (SNB) to hold Bitcoin alongside its existing gold and foreign currency reserves ^[1]. The campaign was driven by prominent Bitcoin advocates Luzius Meisser and Yves Bennaim, who argued that Bitcoin represents a politically neutral counterweight to dollar and euro dependency, thereby reinforcing Swiss sovereignty and neutrality ^[1].

The initiative required 100,000 valid signatures within 18 months. Co-initiator Yves Bennaim confirmed to Reuters that the campaign has collected only roughly half that number and will be allowed to expire ^[1]. Bennaim acknowledged from the outset that the campaign was a bold undertaking, but maintained that it succeeded in at least igniting a public debate about Bitcoin's potential role in monetary policy ^[1]. SNB President Martin Schlegel and the bank's leadership have consistently rejected Bitcoin as a reserve asset, citing excessive volatility and insufficient market liquidity ^[1].

The SNB's position carries a notable irony. Despite publicly dismissing Bitcoin, the central bank has accumulated significant indirect Bitcoin exposure through its equity portfolio. As of March 31, the SNB held 766,100 shares of Strategy - the company formerly known as MicroStrategy - whose valuation is substantially driven by its holdings of more than 818,000 BTC ^[1]. The SNB added roughly 50,000 Strategy shares in the most recent quarter, making the position worth approximately $100 million ^[1]. Elsewhere, the Czech central bank disclosed a direct Bitcoin investment of approximately $1 million as part of a test portfolio in late October 2025, and Kazakhstan's central bank is actively developing a crypto reserve fund ^[1].

On the military side, Admiral Samuel Paparo of U.S. Indo-Pacific Command (INDOPACOM) told a Senate Armed Services Committee on April 21-22, 2026, that Bitcoin represents a "valuable computer science tool as power projection" and confirmed that INDOPACOM is running a Bitcoin node as part of its protocol research ^[2]. The testimony came days after Iran reportedly demanded Bitcoin payment for safe passage through the Strait of Hormuz ^[2]. Admiral Paparo's language echoed the work of Jason Lowery, an MIT fellow and Special Assistant to the INDOPACOM Commander, whose book "Softwar" argues that Bitcoin's proof-of-work mechanism can deter cyberattacks by anchoring digital security to real-world energy expenditure ^[2]. Lowery's book was subsequently pulled from distribution at the request of his military superiors - a move that drew considerable attention ^[2].

Lowery's core thesis holds that Bitcoin's proof-of-work protocol can defend networks against a wide range of cybersecurity threats - from DDoS attacks to disinformation campaigns - by making malicious activity computationally expensive ^[2]. His proposed "Electro-Cyber Dome" concept draws on Adam Back's original Hash Cash idea and uses Bitcoin as its primary working proof of concept ^[2]. Critics, including security researcher Jameson Lopp and Bitcoin Magazine's Shinobi, have pushed back hard, arguing that networks external to Bitcoin cannot meaningfully benefit from Bitcoin's proof-of-work and that Lowery's geopolitical vision is, in Shinobi's words, "delusional" ^[2].

Analysis & Context

The Swiss initiative's failure is instructive, but it should not be read as a rejection of Bitcoin itself. Swiss direct democracy has a high bar - 100,000 signatures is a serious threshold - and the campaign was competing against economic uncertainty, SNB credibility, and a population that, while crypto-aware, does not yet broadly view Bitcoin as a monetary safety net. The more interesting signal is the SNB's indirect exposure through Strategy shares. Central banks rarely accumulate $100 million positions in companies by accident. Whether intentional or not, the SNB's equity portfolio is increasingly correlated with Bitcoin's price performance. This is the kind of quiet, deniable entry into Bitcoin exposure that we are likely to see repeated across other institutions that are not yet ready to defend direct holdings publicly.

The INDOPACOM disclosure is a different kind of milestone entirely. Regardless of whether Lowery's full Softwar thesis proves correct - and the criticisms are substantial and technically grounded - the fact that a four-star admiral is using Bitcoin vocabulary in front of the Senate Armed Services Committee marks a genuine shift. Bitcoin has moved from being a tool discussed in the context of sanctions evasion or illicit finance into a framework for discussing offensive and defensive national power. Even if INDOPACOM ultimately builds its cyber defenses on Hash Cash variants rather than Bitcoin proper, the conceptual legitimacy that this testimony confers on proof-of-work security research is significant. It puts Bitcoin in a conversation about deterrence theory that previously had no room for decentralized protocols.

Historically, technologies that attract serious military attention tend to find adoption pathways that their original communities never anticipated. The internet itself began as a DARPA project. GPS was a military asset before it became a consumer one. Bitcoin's cypherpunk origins were explicitly anti-state, yet the state is now running nodes and commissioning theses. This does not mean Bitcoin is being co-opted or compromised - its protocol is resistant to that. But it does mean that the narrative around Bitcoin's role in the world is becoming significantly more complex, and significantly more consequential.