ECB President Lagarde Says Bitcoin Will Not Enter EU Reserves

European Central Bank (ECB) President Christine Lagarde has firmly dismissed the possibility of any European Union member state adding Bitcoin to its official monetary reserves.

Lagarde’s statement comes in response to Czech National Bank Governor Ales Michl’s proposal to allocate up to 5% of the CNB’s 140 billion euro reserve portfolio to Bitcoin. She stated that the cryptocurrency “fails to meet the necessary criteria for consideration by either the ECB or any other EU nation.”

ECB Declares Bitcoin Reserve Stance

The ECB recently announced a 25-basis-point interest rate cut, bringing its key deposit facility rate to 2.75%. Market predictions accurately anticipated this reduction. This marks the fifth reduction since June 2024, reflecting the ECB’s ongoing efforts to balance sluggish economic growth with a re-acceleration of inflation within the euro area. Market predictions accurately anticipated this reduction.

Lagarde flatly rejected speculation that the ECB would hold Bitcoin as a reserve asset.

“The Governing Council, and most likely the General Council too, believe reserves must be liquid, secure, and safe, free from any suspicion of money laundering or other criminal activity. Therefore, I’m confident bitcoin won’t enter the reserves of any central bank in the General Council,” Lagarde says.

Notably, her comments differ from Fed Chair Jerome Powell’s surprisingly open position. On Wednesday, he declared that “commercial banks can serve crypto customers, provided they understand and manage the risks.

Powell also urged clearer regulations, stating that a stronger regulatory framework for crypto would be beneficial and that Congress was actively pursuing this.

U.S. States Favorably Adopt Bitcoin Reserve

Contrary to the ECB’s stance on holding Bitcoin as a reserve, several US states are considering adding Bitcoin to their reserves. This decision reflects a growing institutional interest in cryptocurrencies, continuing a trend since the start of the Trump administration.

Notably, this follows Utah’s recent approval of a bill allowing investment in digital assets, the bill allows up to 5% of public funds to be invested in digital assets with a market cap exceeding $50 billion.

Several other US states are considering a Bitcoin reserve, further enhancing the world’s largest crypto’s appeal and potentially supporting prices. Approximately eleven states are exploring this, aiming for roughly 10% of their funds in Bitcoin.

During a Wednesday press conference, Powell stated that “many regulated banks already do so,” but the threshold for banks engaging in crypto activities has been higher.