European Central Bank President Christine Lagarde categorically rejected Bitcoin as a reserve asset for EU central banks, citing volatility, money laundering concerns and lack of liquidity required for institutional holdings.**

What Happened: ECB Rejects Bitcoin

Christine Lagarde dismissed the inclusion of BTC in any EU central bank reserves.

She stated that reserve assets must maintain liquidity, security and safety while remaining disconnected from money laundering or criminal activity.

The statement followed a proposal by Czech National Bank Governor Aleš Michl, who advocated for Bitcoin inclusion in the Czech Republic's national reserves. Lagarde rejected the suggestion immediately, reinforcing the ECB's cautious stance toward digital currencies.

The Czech Republic does not use the euro but participates in the ECB's General Council, influencing broader European financial discussions. Several other European central banks, including Poland and Romania, expressed similar reservations about holding cryptocurrencies.

Also Read: USDC Processes $18.3T In Transactions, Overtakes USDT Despite Smaller Market Cap

Why It Matters: Reserve Asset Criteria

Lagarde's position reflects broader institutional resistance toward Bitcoin among major central banks.

Federal Reserve Chair Jerome Powell previously noted legal prohibitions against including Bitcoin in U.S. reserves, citing regulatory uncertainty and price volatility.

Bitcoin remains a significant player in global financial markets despite central bank reluctance. Institutional and retail investors increasingly regard it as a store of value, often comparing it to digital gold.

ARK Invest founder Cathie Wood said the U.S. government might begin purchasing Bitcoin to expand the national strategic reserve beyond confiscated assets.

Wood argued that the administration faces pressure to move beyond its current approach of holding only seized cryptocurrencies ahead of midterm elections.

Read Next: Why Trump Freed CZ And Ross Ulbricht But Left Sam Bankman-Fried To Rot: The Crypto Pardon Hierarchy Exposed