European Central Bank (ECB) President Christine Lagarde stated that Bitcoin (BTC) is unlikely to be adopted as a reserve asset by EU banks. This follows the Czech National Bank’s (CNB) proposal to allocate 5% of public funds to Bitcoin as part of its reserve diversification strategy.

The CNB was set to review this proposal on January 30, with the potential investment exceeding $7.3 billion, based on its $146 billion in total reserves.

ECB Opposes Bitcoin, EU Pursues Digital Euro

During the January 30 conference, Lagarde reaffirmed that Bitcoin would not meet the ECB’s criteria for reserves, which prioritize liquidity, security, and stability. However, other EU countries, including Poland, Slovenia, Switzerland, Germany, and the Czech Republic, have explored Bitcoin reserve options.

Meanwhile, the US has banned central bank digital currencies (CBDCs) through an executive order by former President Donald Trump, while the EU continues its Digital Euro project to compete with dollar-pegged stablecoins.

CNB Considers Bitcoin in Reserve Strategy

CNB Governor Aleš Michl, who proposed the Bitcoin initiative, expressed confidence in Bitcoin’s long-term value despite its volatility. He has emphasized the need for reserve diversification and noted that Bitcoin could play a role in this strategy. No changes will be made until further analysis is completed.

On Thursday, the CNB board approved a proposal to explore investing reserves in additional asset classes, with Michl suggesting that Bitcoin could be considered for diversification, Coindesk reported.

“My goal is to diversify the portfolio, so if bitcoin is good [for that], then let’s have it,” said Michl.

This article was written by Tareq Sikder at www.financemagnates.com.TrendingRead More

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