The ratings agency warns there are additional regulatory and operating risks tied to the country adopting bitcoin as legal tender.
A law passed earlier this year allows Spezialfonds, open only to institutional investors, to invest up to 20% of assets in cryptocurrencies.
The Fitch report suggests that the turmoil also could have the potential to spread to traditional markets.
“Widespread adoption of CBDCs may be disruptive for financial systems if associated risks are not managed,” warn Fitch Ratings analysts Monsur Hussain and Duncan Innes-Ker.
Fitch Ratings published a report Wednesday noting that blockchain can be a long-term solution to issues facing the insurance industry today.