The cryptocurrency community has raised objections to Christine Lagarde, the head of the European Central Bank, regarding her disapproval of including Bitcoin in the reserves of member countries.
During a recent press conference, Lagarde expressed her views.
“Reserves need to be easily accessible, secure, and trustworthy, free from any suspicion of illicit financial activities. Therefore, I do not foresee Bitcoin being adopted by any central banks within the general council.”
Nevertheless, her stance was promptly challenged by the community, asserting that Bitcoin fulfills all the criteria she highlighted.
Bitcoin’s Alignment with ECB’s Reserve Standards
Andre Dragosch, the Research Head at Bitwise Europe, highlighted that Bitcoin boasts higher liquidity than even the most liquid conventional asset, the S&P 500. He pointed out,
“Is Bitcoin liquid? The SPDR S&P 500 ETF (SPY) trades at approximately 22 billion USD in daily volume. In contrast, Bitcoin witnessed a trading volume of 54 billion USD over the past 24 hours.”
In terms of safety, BTC is secured by miners on the most decentralized network, devoid of any counterparty risks. Dragosch emphasized that attempting to compromise Bitcoin’s system would necessitate over $20 billion, making it a comparatively safer choice.
Regarding criminal activities, a 2024 Chainalysis report indicated that cryptocurrencies only accounted for less than 1% of illicit cases. The analyst elaborated,
“A mere 0.14% of all on-chain transactions involve illicit activities such as money laundering, with Bitcoin constituting only a fraction of that.”
Supporting Dragosch’s viewpoint, another user named Daniel Sempere reiterated that the Bitcoin network safeguards around $2 trillion in wealth and has never experienced a successful hacking attempt.
It is important to note that Lagarde’s statement was in response to the recent decision by the Czech Republic to diversify its national reserves by incorporating BTC.
Earlier, the Governor of the Czech National Bank, Ales Michl, reaffirmed the bank’s interest in including Bitcoin in its reserves once approved.
Whether Michl will reconsider his stance on Bitcoin following Lagarde’s warning remains uncertain. In the interim, the odds on Polymarket of another country adopting BTC briefly surged by +70%.