By Michael Scott
European Central Bank (ECB) President Christine Lagarde hinted Thursday that Bitcoin adoption is not a priority for member states.
The ECB head discouraged Bitcoin adoption in a Thursday, Jan. 30 press conference in Frankfurt. Despite the growing interest in adding Bitcoin to the treasury reserves across the world, she dismissed the speculation that member countries will allocate a portion of their reserves to Bitcoin.
ECB Hesitant to Bitcoin Reserves
Lagarde informed the audience at the Frankfurt conference that Bitcoin is prone to volatility. Additionally, she decried that the pioneer cryptocurrency has yet to sever ties to illicit finance and is thus unfit to hold it as a reserve asset.
Lagarde reiterated the governing council’s stance that reserves should be liquid, secure and safe. The ECB president expressed confidence that none of the central banks within the general council will add Bitcoins to its reserves.
The comments by Lagarde underscore the skepticism existing among the EU lawmakers toward BTC despite the recent appreciation witnessed since President Donald Trump’s victory in the November 2024 elections. Also, the EU lawmakers are yet to shake off the negative sentiment towards BTC despite the growing interest and efforts to add it within state-level governments and institutions.
Although the ECB cannot directly prohibit the member states from investing in Bitcoin, it can enforce such will via sanctions, administrative penalties, or investigations.
Tailwinds Fueling Bitcoin Adoption
The ECB opposition to the Bitcoin reserve program emerges as Bitcoin stages an impressive 145% rally over the past 12 months to change hands at $104,779 per CoinGecko data. The surge above $100K lifts the Bitcoin market capitalization above the $2 trillion milestone. The gains are bolstered by the shift in regulatory climate and approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC).
The tailwinds are driving the influx of institutional inflows into Bitcoin while inspiring over a dozen state governments to formulate legislation to create BTC reserves. By press time, Illinois, New Hampshire, Texas, Pennsylvania, Wyoming, and Massachusetts were among those toying with the idea of adding BTC to their state funds.
The wave of Bitcoin adoption builds upon Wyoming Senator Cynthia Lummis, who proposed the addition of BTC to the federal balance sheet last year. The endorsement kickstarted interest from lawmakers seeking to supercharge the US dollar position as the reserve currency globally for subsequent decades.
Heightened efforts towards Bitcoin Reserve initiatives coincide with the swift move by President Donald Trump to honor promises issued during his campaign trail. The president issued an executive order to establish a working group on digital asset markets. This move adds to the appointment of pro-crypto figures to head key decision-making units behind the country-wide support for digital assets.
The executive order guides committee formation mandated to conduct a feasibility study on digital assets in addition to the US reserves. Nonetheless, the executive order language notably excluded Bitcoin.
Europe Warms Up to BTC
While the ECB President and lawmakers are primarily hesitant to back Bitcoin, some government officials within the continent suggest warming up to this token.
An Italian lawmaker, Marcello Coppo, urged banking foundations to allocate a portion of their income to Bitcoin, citing its significant returns. Although the politician does not foresee Italy replicating US efforts to have a strategic Bitcoin reserve, he considers investing in Bitcoin could accelerate support for the pioneer crypto. This emerged as Italy’s largest bank, Group Intesa Sanpaolo, bought $1 Million worth of Bitcoin.
Meanwhile, Czech National Bank governor Aleš Michl intends to consider the viability of adding BTC to the nation’s reserves. He admitted that while adding this crypto was unthinkable a few years ago, he would entertain allocating 5% of the country’s $146 billion reserve, translating to $7 billion worth of Bitcoin.
Despite such proposals by policymakers, the ECB’s firm stance is bound to bring a strong position, leaving the adoption of BTC by EU member states as a far-off possibility.
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