Christine Lagarde, President of the European Central Bank (ECB), has ruled out the possibility of Bitcoin being used as a reserve asset by central banks.

Speaking at a press conference on January 30, Lagarde asserted that Bitcoin does not fulfill the necessary conditions for reserve holdings. She mentioned that, after discussions with its governor, the Czech National Bank is also unlikely to adopt Bitcoin for reserves. She highlighted that reserve assets must be safe, liquid, and secure—requirements that Bitcoin fails to satisfy.

"Reserves have to be liquid, secure, and safe. Also, they should not be plugged by the suspicion of money laundering or other criminal activities, and for that, I’m confident that bitcoin will not enter the reserve of any of the central banks of the general council," Lagarde stated.

Having previously voiced her concerns over cryptocurrencies, Lagarde reinforced the ECB’s cautious stance on digital assets, stressing their volatility and potential links to illicit activities. Her remarks align with ongoing regulatory scrutiny surrounding the stability and security of cryptocurrencies.

Do Other Nations Agree with Lagarde's Approach?

While European Central Bank President Christine Lagarde has dismissed Bitcoin as a reserve asset, several countries and U.S. states are actively exploring its adoption into their reserves:

• El Salvador: In 2021, El Salvador became the first country to adopt Bitcoin as legal tender. However, in January 2025, under pressure from the International Monetary Fund (IMF), the Salvadoran government reformed its Bitcoin law, making its use voluntary rather than mandatory and removing its status as legal tender. Despite this, the government continues to purchase Bitcoin and promote its use.

• Brazil: The Brazilian government has proposed a bill to establish a Sovereign Strategic Reserve of Bitcoins (RESBit), aiming to allocate 5% of Brazil's international reserves to Bitcoin. This proposal is currently under legislative consideration.
• U.S. States:

Several U.S. states have proposed or are considering legislation to establish strategic Bitcoin reserves:

• Texas: A bill introduced in December 2024 proposes creating a state Bitcoin reserve, with acquired Bitcoin held in cold storage for at least five years to ensure security and long-term value.

• Pennsylvania: In November 2024, lawmakers proposed a bill to allocate up to 10% of the state's general, emergency, and investment funds to Bitcoin, potentially adding nearly $1 billion worth of Bitcoin to its reserves.

• Ohio: The Ohio Bitcoin Reserve Act, introduced in December 2024, aims to establish a Bitcoin fund within the state treasury, granting the treasurer discretion over its purchase and management.

• New Hampshire: A bill proposed in January 2025 seeks to diversify the state's holdings by allowing investment in both precious metals and digital assets, including Bitcoin.

• North Dakota: A resolution introduced in January 2025 encourages the state to invest a portion of its funds in digital assets and precious metals.

These initiatives reflect a growing interest in Bitcoin as a reserve asset among certain countries and U.S. states. However, many of these proposals are still under consideration and have not been finalized or implemented.It's important to note that the adoption of Bitcoin as a reserve asset remains a topic of debate, with varying perspectives among policymakers and financial institutions.