ECB chief Lagarde slams Bitcoin reserves as illiquid, confident that Michl will back down

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.

European Central Bank (ECB) President Christine Lagarde has slammed a plan by the Czech central bank to acquire Bitcoin (BTC) for its foreign exchange reserves, calling the move “surprising” and adding that the apex cryptocurrency is unlikely to enter the reserves of any ECB member state.

Lagarde’s comments came during a press meeting following the ECB’s interest rate cut announcement on Friday. When asked to comment on Czech National Bank (CNB) Governor Aleš Michl’s Bitcoin acquisition plan, Lagarde noted 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.

“Reserves should be safe, liquid and fully integrate the suspicion of money laundering or other criminal activities,” she said, adding that she is “confident that Bitcoins will not enter the reserves of any of the central banks of the members of the general council.”

The ECB President’s comments come amid a broader debate over the role of cryptocurrencies in central bank reserves. While some countries, like the United States and the Czech Republic, are considering adding Bitcoin to their reserves, others, like the European Union, are more skeptical.

The EU central bank does not want $BTC.

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Despite Lagarde’s misgivings, Governor Michl took to Twitter (NYSE:TWTR) 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.

“At our meeting on Thursday, after discussing a document on international reserve management in 2024, the Bank Board of the Czech National Bank (CNB) approved a proposal to analyse the options for investing in additional asset classes,” wrote Michl.

“The central bank has been increasingly discussing the possibility of including BTC in Czech reserves this year, with the bank’s council set to decide on the matter in April.”

However, BTC’s inclusion in Czech reserves is far from a done deal. 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.