ECB against bitcoin: the regulator is not ready to recognize cryptocurrency as a reserve asset

What’s new? The European Central Bank intends to reconsider its relations with any national central bank that decides to include bitcoin in its reserves. This was announced by Piero Cipollone, a member of the ECB’s executive board, in an interview with Reuters.

In such situations, the institution would need to assess the risks associated with repo transactions and swap lines, he explained. According to Cipollone, there are no signs yet that eurozone central banks may integrate the first cryptocurrency. Bitcoin is not suitable as a reserve asset because its attractiveness is based on speculation, he said.

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Cipollone also refuted the analogy between bitcoin and gold, despite their similarities in limitation and perception as a means of accumulation. He noted that gold has intrinsic and industrial value, which is not the case with bitcoin.

What else did the official say? He also expressed concern about stablecoins, which he believes could become more common for European settlements, especially if their use becomes widespread.

“This is worrisome because if people in Europe start to use stablecoins to pay, given that most of them are American and dollar-based, they will be transferring their deposits from Europe to the United States,” he noted.

In this context, assets such as USDT or USDC could compete with the envisioned digital euro. CBDC, which is being developed by the ECB, is seen primarily as an instrument for retail payments, especially because of the planned restriction on quantitative transactions and deposits. Cipollone added that the central bank is exploring various innovative possibilities for the digital asset, including conditional payments. In such scenarios, the transfer of funds will take place automatically when certain conditions or events are met or, conversely, when certain conditions or events are not met, he explained.

Earlier it became known that the Lower House of the Parliament of the Czech Republic unanimously adopted the Law on Digitalization of the Financial Market, which is designed to implement the rules of regulation of cryptocurrencies and strengthen consumer protection. According to it, the main supervisory body is appointed the Czech National Bank.