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ECB President Christine Lagarde dismissed the idea of European central banks adding Bitcoin to their reserves, but the Czech National Bank just approved a plan to explore exactly that.
Lagarde, speaking at a press conference in Frankfurt on Thursday, said Bitcoin is too volatile and also linked to illegal activities, making it unsuitable as a reserve asset.
“There is a view around the table of the governing council … that reserves have to be liquid, that reserves have to be secure, that they have to be safe,” Lagarde said. “I’m confident that Bitcoins will not enter the reserves of any of the central banks of the general council.”
🚨 Breaking News: 🇪🇺 European Central Bank President, Christine Lagarde, asserts, "I'm confident that #Bitcoin will not be included in EU reserves." 💬📉 pic.twitter.com/h9jEFty0Dg
— The_Boiidan🐐 (@TheRealBoiidan) January 31, 2025
The Czech National Bank Explores Bitcoin Investment Despite Lagarde’s Rejection
Lagarde’s comments reflect the view of many in Europe who remain skeptical about Bitcoin despite its rising value and growing adoption in the Americas and many developing nations.
But the Czech National Bank thinks differently. Governor Aleš Michl this week proposed allocating 5% of the bank’s 140 billion euro reserves to Bitcoin, and yesterday that proposal was approved by the bank.
The Czech Republic is not part of the Eurozone, the currency union of EU member states, but it is represented on the ECB’s General Council, whose members Lagarde said she was confident would not add Bitcoin to their reserves.
While the European Central Bank can’t directly stop its member states from investing in Bitcoin, it can influence their decisions through investigations, fines, and penalties.
Meanwhile, institutional investment in Bitcoin has grown, and some US states are considering creating their own Bitcoin reserves. States like Pennsylvania, Texas, and Illinois are now exploring this idea.
“Lagarde says bitcoin is unsuitable for reserves because it must be ‘liquid, secure, and safe,.’” said Lucien Bourdon, Bitcoin Analyst at Czech hardware wallet manufacturer Trezor. ”Yet bitcoin is one of the most liquid assets in the world, trading 24/7 without requiring a counterparty.”
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