In a meeting following the European Central Bank’s (ECB) interest rate cut announcement, the bank’s President, Christine Lagarde, reiterated her long-standing criticism of cryptocurrencies in general, and Bitcoin (BTC) in particular.
The central bank president, who stated that crypto was worth ‘nothing’ back in 2022, and later revealed that her son had lost roughly 60% of his investment in digital currencies, was asked to comment on Czech National Bank (CNB) Governor Aleš Michl’s Bitcoin acquisition plan — which would see the CNB allocate up to 5% of its total reserves to the leading cryptocurrency.
At press time, Bitcoin was changing hands at $106,330 — having marked an 11.62% increase in price since the beginning of the year. However, even a cursory glance at the chart reveals significant volatility — which is the basis of the criticism levied against the asset (at least in terms of its role as a possible reserve currency).
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ECB chief Lagarde slams Bitcoin reserves as illiquid, confident that Michl will back down
In the January 30 meeting, Lagarde stated that the Governing Council and General Council of the ECB view the leading digital asset as both insufficiently liquid and insufficiently safe to serve as a reserve currency.
Further clarifying the latter part of her statement, she opined that reserves shouldn’t ‘be plagued by the suspicion of money laundering or other criminal activities’.
“I am confident that Bitcoins will not enter the reserves of any of the central banks of the members of the general council.”
Finally, the ECB President expressed confidence that Bitcoin would not find its way into the reserves of any of the European central banks. Lagarde added that she had a good conversation with her Czech colleague — and finished by reiterating her confidence that Michl is convinced of the necessity of safe, liquid, and secure reserves.
Despite Lagarde’s misgivings, Governor Michl took to X later in the day to announce that the Bank Board of the CNB had approved a proposal to analyze the options for investing in additional asset classes.
BTC’s inclusion in Czech reserves is far from a done deal, however — many of the same criticisms levied by Lagarde have been echoed by Czech Finance Minister, Zbyněk Stanjura, who has warned against the CNB governor’s plan to purchase billions of euros worth of Bitcoin.
Featured image via Shutterstock
