No Bitcoin in European Union Reserves, Confirms Lagarde – Here’s Why

On Thursday, the European Central Bank (ECB) cut interest rates as expected, leaving the possibility for more easing in the future. While the ECB remains confident in its ability to control inflation, concerns about global trade continue to weigh heavily on the eurozone’s economic outlook.

Keep reading as we break down the latest moves and what they could mean for the economy.

Is the Economy Very Weak?

This marks the ECB’s fifth rate cut since June, reducing the deposit rate from 3.0% to 2.75%. Although recent surveys show some recovery, the eurozone economy remains weak, and inflation is still slightly above the ECB’s 2% target. To address these issues and support economic growth, the rate cut was necessary. The ECB is confident that the “disinflation process is well on track.”

Inflation is still high because wages and prices are adjusting slowly after the earlier inflation surge. However, as expected, wage growth is slowing down, which helps reduce inflationary pressures. Company profits are also playing a role in easing inflation.

Tariff Threats Still Loom

The ECB policymakers likely felt some relief when U.S. President Donald Trump Donald Trump Donald Trump is an American former president politician, businessman, and media personality, who served as the 45th president of the U.S. between 2017 to 2021. Trump earned a Bachelor of science in economics from the University of Pennsylvania in 1968. Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote. As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.–Mexico border, and implemented a family separation policy. Trump has remained a prominent figure in the Republican Party and is considered a likely candidate for the 2024 presidential election President administration did not impose the feared blanket trade tariffs. However, the threat of tariffs still casts uncertainty on the economic outlook. Tariffs can weaken economic growth, and if other countries respond with their own tariffs, it could drive up inflation. This could complicate the ECB’s plans to ease interest rates further.

In a similar move, the U.S. Federal Open Market Committee (FOMC) recently decided to keep interest rates steady, ranging from 4.25% to 4.5%, which was in line with market expectations.

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No Bitcoin for EU Reserves

ECB President Christine Lagarde stated that she is confident Bitcoin will not be included in the European Union’s reserves. She emphasized that central bank reserves must be secure, liquid, and free from suspicion of criminal activities like money laundering.

“There is a view around the table of the Governing Council and most likely the General Council as well that reserves have to be liquid, that reserves have to be secure, that they have to be safe, that they should not be plagued by the suspicion of money laundering or other criminal activities,” Lagarde noted.

These concerns make Bitcoin an unlikely candidate for inclusion in any central bank’s reserves.

Czech Republic’s Concerns About Bitcoin Reserves

Meanwhile, in the Czech Republic, there is ongoing debate about adopting Bitcoin as a national reserve. Finance Minister Zbynek Stanjura has raised concerns about Bitcoin’s volatility, calling it unsuitable for reserves. He noted that the government cannot override the Czech National Bank’s (CNB) decisions, but he stressed doubts about Bitcoin’s stability as a reserve asset.

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While some central banks remain cautious, the push for digital assets continues. Let’s see where the conversation goes next.