European Central Bank President Lagarde Rejects Bitcoin In EU Reserves

European Central Bank (ECB) President Christine Lagarde confirmed that Bitcoin (BTC) will not be included in EU’s central bank reserves.

Lagarde Says Bitcoin Lacks Key Reserve Requirements

Lagarde stated that Bitcoin does not meet the necessary criteria for liquidity, security, and safety. That makes it unsuitable for official holdings according to her.

The view among the Governing Council or at least most of the General Council seems to be that reserves should be liquid.

They should be safe, not plagued with the suspicion that they were used for money laundering or other criminal activities.

“This is why, I have no doubt that Bitcoin will never be integrated in the reserves of the central banks of the General Council,” Lagarde said.

This echoes the ECB’s guarded attitude to cryptocurrencies even as the institution investigates central CBDCs and regulates over digital assets.

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Concerns Over Bitcoin’s Volatility and Regulation

One of the main reasons traditional financial institutions, including central banks, have yet to invest in the asset as a reserve asset is due to Bitcoin’s price volatility.

Cryptocurrency market is highly volatile in nature. It also contributes to the risk of overzealous governments and financial institutions dealing with such large reserves.

There are also legal and regulatory uncertainties as to Bitcoin. Regulatory oversight of the decentralized Bitcoin directly complicates this due to the nature.

The ECB has several times cautioned that cryptocurrencies might be risky. The reason being that they can be used for criminal purposes and because they lack consumer protection measures.

Growing Interest in Bitcoin Reserves Across the U.S.

Bitcoin does not have an ally in the ECB, which has been forthright in its rejection of the cryptocurrency as a reserve asset. However, it is well-known that some U.S. states find the idea acceptable.

Currently, Illinois State Representative John Cabello has introduced House Bill 1844 to create a Strategic Bitcoin Reserve for the state.

The proposed legislation aims to make Bitcoin a financial asset of the Illinois government. This is an indication of increased interest in state level Bitcoin adoption.

Furthermore, Texas Lieutenant Governor Dan Patrick has said that he will put a Bitcoin reserve in his top 40 bills to pass in the 2025 legislative session.

Senate Bill 21, which outlines the initiative to become a leading state for digital asset adoption, was laid out.

The Texas Bitcoin Reserve would constitute a state held asset, in line with other regions’ legislative efforts.

It is clear that although European financial institutions are still ambiguous to this new tide, some U.S. states are proactively integrating Bitcoin within their financial strategies.