(Jan 30): European Central Bank (ECB) president Christine Lagarde predicted that no European Union (EU) country will choose to add bitcoin to its monetary reserves.
Responding to comments by her Czech counterpart, Ales Michl, that his institution will look into the matter, she cast doubt on such prospects, saying the cryptocurrency doesn’t meet criteria required by policymakers either of the ECB or any other nation in the bloc.
“I am confident” that “bitcoins will not enter the reserves of any of the central banks of the General Council” of the ECB, Lagarde told reporters in Frankfurt.
She spoke after a decision of her officials to cut interest rates, and hinted that the matter not only came up in their meetings this week, but also sparked an exchange of views with Prague. The Czech Republic is in the EU, but not a member of the eurozone.
“I think 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,” Lagarde said.
The Czech National Bank (CNB) governor shared his notion of buying bitcoin with the Financial Times this week, saying that it could potentially represent 5% of its reserves. He subsequently posted on X that the matter is “only at the stage of analysis and discussions”, and on Thursday the Czech finance minister expressed “misgivings” on such a move.
“I had a good conversation with my colleague from the Czech Republic, and I leave it to him to make whatever announcement he wants to make,” Lagarde said. “But I’m confident that he’s convinced — as we all are — of the necessity to have liquid, secure and safe reserves.”
The seven-member policy board of the Czech central bank approved a plan on Thursday to “analyse the options for investing in additional asset classes” to its reserves.
“At the proposal of governor Ales Michl, the CNB is to assess whether it would be appropriate in terms of diversification and return to include other asset classes,” officials said in a statement that didn’t explicitly mention cryptocurrencies. “The bank board will then decide how to proceed further. No changes will be implemented in this area until then.”
Lagarde’s restatement of scepticism arrives at a moment of intensified scrutiny on bitcoin, which touched a record earlier this month as US President Donald Trump entered the White House. He has promised friendlier regulation and backed the idea of a strategic national reserve for the cryptocurrency.
The possibility of including bitcoin for central bank reserves was also aired last month by former German finance minister Christian Lindner.
However, two ECB staff officials, writing in the FAZ newspaper, described the prospect as “unconvincing”, and cited the asset’s volatility as a potential danger to credibility. Bundesbank chief Joachim Nagel, meanwhile, rejected bitcoin and its ilk as “digital tulips”.
“Reserve assets must be secure, liquid and transparent,” he told Platow Brief. “Bitcoin is none of these things.”
In neighbouring Switzerland, campaigners have started gathering signatures to force a national vote on whether the constitution should require Swiss National Bank to add it to its reserves, in the same way that it mandates gold holdings. Its president, Martin Schlegel, dismissed crypto assets in November as a “niche phenomenon”.
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