ECB President Lagarde Rules Out Bitcoin in EU Reserves, Here’s Why

European Central Bank (ECB) President Christine Lagarde has reaffirmed that Bitcoin will not be included in the official reserves of the European Union. She stated that the digital asset does not meet the necessary criteria for liquidity, security, and safety, making it unsuitable for central bank holdings.

Lagarde Confident Bitcoin Will Not Enter ECB Reserves

Speaking at a press conference, ECB President Christine Lagarde dismissed the possibility of Bitcoin becoming part of the reserves of any eurozone central bank. She emphasized that reserves must be liquid and free from concerns related to illicit activities.

“There is a view around the table of the Governing Council and most likely the General Council as well that reserves have to be liquid, that reserves have to be secure, that they have to be safe, that they should not be plagued by the suspicion of money laundering or other criminal activities. And as a result, I’m confident that Bitcoin will not enter the reserves of any of the central banks of the General Council,” Lagarde stated.

Her comments came in response to discussions within the Czech Republic, where the country’s central bank has approved a proposal to consider investing in Bitcoin as a reserve asset.

Czech Republic Central Bank Approves Bitcoin Reserve Proposal

The Czech National Bank (CNB) has taken a step toward Bitcoin adoption by approving a proposal to assess the potential of including Bitcoin in its foreign reserves. CNB Governor Aleš Michl had previously suggested investing up to 5% of the bank’s €140 billion reserves in Bitcoin as part of a diversification strategy.

While the Czech government has expressed concerns over Bitcoin’s volatility, the CNB remains independent in its decision-making. 

Finance Minister Zbyněk Stanjura acknowledged the bank’s authority but reiterated that Bitcoin’s price fluctuations could make it unsuitable as a reserve asset.

Bitcoin Reserve; US Lawmakers Debate Strategy

In contrast with ECB President Christine Lagarde’s stance, in the United States, Texas Lieutenant Governor Dan Patrick has announced plans to establish a Bitcoin reserve for the state.

Meanwhile, the concept of a US Strategic Bitcoin Reserve is once again gaining attention. As the Czech Republic moves toward adopting a Bitcoin reserve, Senator Cynthia Lummis has urged the US government to take decisive action. 

Elsewhere, Swiss cryptocurrency advocates have launched an initiative for the Swiss National Bank to hold Bitcoin, but the bank has expressed doubts about its viability. Similarly, central bank officials in South Africa have criticized the concept of a Bitcoin reserve.

ECB Cuts Interest Rates Amid Economic Weakness

Alongside discussions on Bitcoin, the ECB announced a 25-basis-point rate cut, bringing the deposit rate to 2.75%. This marks the fifth rate cut since June as the ECB seeks to support the eurozone economy.

“The disinflation process is well on track,” ECB President Christine said, expressing confidence that inflation will reach the ECB’s 2% target within 2025. The rate cut comes as growth in the eurozone stagnates, with major economies such as Germany and France experiencing contractions.

Meanwhile, the US Federal Reserve has chosen to keep interest rates unchanged in its latest policy meeting. The Fed’s benchmark rate remains between 4.25% and 4.50%, as officials assess economic conditions before making further adjustments.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

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