ECB President Christine Lagarde Rejects Bitcoin for EU Reserves
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The European Central Bank (ECB) lowered its deposit rate by 25 basis points to 2.75% on Thursday, a move widely expected by markets.
At the same time, ECB President Christine Lagarde firmly rejected speculation that Bitcoin could be added to the central bank’s reserves.
Beyond the rate cut decision, Lagarde made it clear that Bitcoin would not be considered as part of the ECB’s reserves, citing liquidity, security, and regulatory concerns.
Her remarks contrast with the more open stance adopted by some policymakers in other regions, including the United States.
ECB Rejects Bitcoin Reserves: Will Europe’s Position Shift?
Speaking at the press conference, Lagarde categorically ruled out Bitcoin as part of the ECB’s reserves, dismissing any speculation regarding its future inclusion.
“Reserves have to be liquid, reserves have to be secure, they have to be safe, and they should not be plagued by money laundering or other criminal activities,” Lagarde said.
She added that Bitcoin’s volatility and association with illicit activities make it unsuitable for ECB reserves.
Her comments followed remarks from Czech National Bank Governor Ales Michl, who indicated that Bitcoin was being discussed as a possible diversification tool but had not been formally considered for reserves.
Lagarde was unequivocal in her opposition, expressing confidence that no European central bank under the ECB’s jurisdiction would adopt Bitcoin as part of its reserves.
The ECB’s firm rejection of Bitcoin contrasts with the more nuanced approach taken by Federal Reserve Chair Jerome Powell, who recently acknowledged that commercial banks are free to serve crypto clients as long as they effectively manage associated risks.
Powell also called for greater regulatory clarity around cryptocurrencies, indicating that U.S. financial institutions may have more flexibility in handling digital assets than their European counterparts.
Despite the ECB’s rejection, Bitcoin’s price climbed 3% in the past 24 hours, surpassing $105,000.
While European regulators remain skeptical, over 10 U.S. states have moved to establish strategic Bitcoin reserves, and several other nations are exploring similar policies.
ECB Signals Possible Rate Cuts as Inflation Slows
Lagarde emphasized that the ECB’s decision-making process remains data-dependent but indicated that additional rate cuts could be in the pipeline should economic conditions warrant further monetary easing.
“We know the direction of travel,” she stated, adding that incoming data will determine the pace and magnitude of future cuts.
With inflation still above the ECB’s 2% target but showing signs of moderation, policymakers are cautiously optimistic about achieving price stability by 2025.
Market participants anticipate at least three additional rate cuts this year, with another 25-basis-point reduction potentially occurring at the ECB’s next policy meeting.
However, Lagarde stressed that the timing will depend on economic indicators, particularly inflation data and financial stability.
Despite the rate cut, Lagarde acknowledged that growth risks persist, citing geopolitical tensions and trade frictions as potential headwinds.
The eurozone economy stagnated in the fourth quarter of 2024, with major economies such as Germany and France posting unexpected contractions.
Weak confidence among businesses and consumers remains challenging, and declining trade activity threatens to slow the region’s economic recovery.
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