European Central Bank Rejects Creation of Bitcoin Reserve

The European Council believes that Bitcoin is unsuitable as a strategic financial reserve for central banks due to its lack of liquidity, reliability, and security.

Lagarde during the Munich Security Conference 2018 / MSC

Bitcoin won’t be included in the reserves of eurozone central banks, as confirmed by Christine Lagarde, President of the European Central Bank (ECB), during a press conference. She emphasized that central bank reserves must be liquid, reliable, and safe, and shouldn’t be exposed to risks related to money laundering or other illicit activities.

Lagarde noted that she discussed this matter with the Governor of the Czech National Bank (CNB), who had publicly voiced a similar initiative. However, she stressed that the final decision would rest with the CNB’s board of directors.

Meanwhile, Bloomberg reports that Zbyněk Stanjura, Finance Minister of the Czech Republic, warned the country’s central bank against adopting Bitcoin as a reserve asset due to BTC’s high volatility. However, he reaffirmed the CNB’s independence in making such financial decisions.

The CNB board of directors generally approved Governor Aleš Michl’s proposal to explore investments in alternative asset classes. However, Bitcoin wasn’t explicitly mentioned in the bank’s official press release following its board meeting. Any changes in the CNB’s financial reserve structure will be disclosed in quarterly reports on international reserves and annual financial statements.

Recently, it was revealed that the CNB governor planned to propose allocating 5% of the Czech Republic’s foreign exchange reserves into Bitcoin as part of a diversification strategy. Despite skepticism from European policymakers, the global trend of adopting BTC as a strategic reserve asset continues to gain momentum .