The ECB Rejects Bitcoin as a Reserve Asset, But Will Central Banks Follow Suit?

The debate over Bitcoin's role in global finance has heated up after Christine Lagarde, President of the European Central Bank (ECB), firmly rejected the idea

The President of the European Central Bank (ECB) has firmly rejected the idea of Bitcoin (BTC) being used as a reserve asset by central banks under her jurisdiction.

Christine Lagarde was asked about Bitcoin’s suitability as a reserve asset during a recent press conference. She responded:

“Reserves have to be liquid, secure, and safe, and must not be linked to money laundering or criminal activity. For these reasons, I am confident that Bitcoin will not be included in the reserves of any central bank under the ECB’s jurisdiction.”

Her comments come at a time when some European countries are considering adding Bitcoin to their national reserves, including the Czech Republic.

But does Bitcoin truly fail to meet the requirements for a reserve asset? The crypto community doesn’t think so.

Bitcoin’s Liquidity: More Than Traditional Assets?

One of Lagarde’s biggest arguments against Bitcoin is that it isn’t liquid enough to serve as a reserve asset.

However, crypto analysts strongly disagree. Andre Dragosch, Head of Research at Bitwise Europe, compared Bitcoin’s liquidity to traditional financial assets and found surprising results.

“Is Bitcoin liquid? SPDR S&P 500 ETF (SPY) trades around $22 billion in volume per day. Bitcoin just had $54 billion in trading volume over the past 24 hours.”

These numbers suggest that Bitcoin is more liquid than many traditional assets—including stocks that central banks already hold in their reserves.

Bitcoin’s Security: The Strongest Network?

Lagarde also claimed that Bitcoin is not secure enough to be a reserve asset. However, crypto experts argue that Bitcoin’s decentralized nature makes it one of the most secure financial systems in the world.

Bitcoin is protected by a global network of miners that ensure transactions are verified correctly. To compromise the system, an attacker would need at least $20 billion in computing power, making it nearly impossible.

Unlike traditional banks, which can suffer from hacking and fraud, Bitcoin has never been hacked in its 15-year history.

Bitcoin and Crime: The Data Tells a Different Story

One of the most common arguments against Bitcoin is its connection to money laundering and illegal activities.

But blockchain analysis companies like Chainalysis have repeatedly shown that crypto-related crime makes up less than 1% of all transactions.

In fact, a 2024 Chainalysis report found that:

“Less than 0.15% of cryptocurrencies received by illicit addresses in 2023 were ultimately used to fund scams, and less than 0.04% went towards darknet markets.”

Bitcoin transactions are also fully traceable on the blockchain, making it much harder for criminals to use than cash or offshore bank accounts.

Czech Republic’s Interest in Bitcoin Drives ECB Backlash

Lagarde’s strong stance against Bitcoin comes at a time when some European countries are exploring BTC as part of their national reserves.

Recently, the Czech National Bank Governor, Ales Michl, stated that the country’s central bank is considering adding Bitcoin to its reserves, pending government approval.

After this declaration, betting odds on Polymarket for another country adopting Bitcoin briefly surged by over 70%, showing that many investors believe it’s only a matter of time before a country formally includes BTC in its reserves.

The big question now is: Will the Czech Republic push forward with Bitcoin despite ECB warnings?