ECB Adviser Reiterates the Bank’s Negative Stance on Bitcoin as the US Explores the Creation of a Strategic Bitcoin Reserve

Nation-state Bitcoin reserves are a risky idea, ECB adviser Jürgen Schaaf told Cointelegraph while addressing the question of BTC adoption by global central banks.

An adviser to the European Central Bank (ECB) has doubled down on the bank’s negative stance on Bitcoin (BTC) as the United States explores the creation of a strategic Bitcoin reserve.

ECB adviser Jürgen Schaaf told Cointelegraph that nation-state Bitcoin reserves are a “risky idea” in response to a question about the possibility of global central banks adopting BTC.

Schaaf argued that while it makes sense for governments to maintain reserves of energy sources like oil and gas, there is “no real economic need for Bitcoin” because the cryptocurrency has “no real economic necessity or relevant usage.”

Schaaf’s position aligns with recent remarks by ECB president Christine Lagarde, who expressed confidence that Bitcoin is “failing” at being a form of payment.

Bitcoin reserves would fuel speculation, not stability - Schaaf

Pushing back on the idea of the ECB adding BTC to its reserves, Schaaf noted that there are different types of strategic reserves, such as the stockpiling of raw materials, which can be released during crises to avoid higher prices for imports.

“Sovereign wealth funds, which invest national savings in countries with structural balance-of-payments surpluses and low debt — often due to high endowment with scarce raw materials — is another example,” the ECB adviser stated.

“However, in the US and Europe, reducing public debt takes precedence over profitable investments,” he added.

According to Schaaf, there are a number of things that make Bitcoin an “unsuitable asset for central banks,” including “extreme volatility, illicit use and susceptibility to manipulation.” He added:

“Moreover, Bitcoin is not relevant for payments or other productive uses in the real economy. Finally, the opportunity cost of holding an asset that is almost surely overvalued would be very high.”

Schaaf’s remarks come amid a massive wave of volatility in the crypto markets, with analysts recording $1.5 billion in crypto liquidations over the past 24 hours.

Related: Metaplanet, El Salvador stack Bitcoin as BTC slides 5% in 10 hours

Bitcoin, which peaked above $106,000 on Dec. 17, 2024, has dropped 7% in the past 24 hours, falling below $88,000 on Feb. 25 for the first time since mid-November, according to CoinGecko data.

Could Bitcoin help countries address national debts?

While Schaaf sees public debt reduction as separate from potential reserve investments, some Bitcoin advocates argue that BTC could help governments manage their financial burdens.

In December, asset management firm VanEck estimated that the US could reduce its national debt by 35% in the next 24 years if it created a reserve of 1 million BTC.

The estimation came in line with a bill proposed by Senator Cynthia Lummis, who has been pushing state Bitcoin adoption as a tool to address trillions in US debt for years.

On the other hand, some skeptics have questioned whether the Bitcoin accumulation by the US government could help fix the $35-trillion debt that has been rising since the 1980s.

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