✨ Will the ECB Follow the U.S. in Adding BTC to Reserves?
posted 30 Dec 2024
European countries are exploring the possibility of including BTC in their reserves to keep up with the U.S. in the growing race for leadership in the global digital asset market. With the rapid development of the crypto industry and increasing interest from investors and financial institutions, this issue is gaining urgency.
Former German Finance Minister Christian Lindner has called for the European Central Bank (ECB) and the Bundesbank to consider adding Bitcoin to their reserves. He noted that similar discussions are taking place in the U.S., which is pursuing notably progressive policies toward virtual currencies.
According to Lindner, the U.S. seeks to lead globally not only in traditional finance but also in the cryptocurrency space. Washington is officially exploring the inclusion of BTC in the Fed’s reserves alongside traditional currencies, oil, and gold.
While acknowledging the independent decision-making of the ECB and Bundesbank, Lindner urged Europe not to lag behind the U.S. He emphasized that Frankfurt should promptly examine the potential role of BTC as a strategic reserve asset. In his view, this could strengthen the resilience of Europe’s financial system, especially as crypto assets now account for a substantial share of global wealth growth.
Christian Lindner. Source: Die Zeit
Christian Lindner isn’t the first European official to raise this issue. Just two weeks ago, Sarah Knafo from the European Parliament made a similar proposal.
While acknowledging the risks associated with cryptocurrency volatility, Lindner noted that these risks are well understood, and no one would allocate an entire reserve to this asset class. He also highlighted the decentralized nature of cryptocurrencies, which he believes reduces political risks. Furthermore, Lindner pointed out that traditional assets, such as precious metals, are also subject to price fluctuations.
The EU’s push to stay competitive with the U.S. in the development of the crypto asset market is motivated by several key factors:
- Attracting investments and driving innovation within the region.
- Ensuring European companies remain competitive on the global stage.
- Preserving control over the financial system in an era of rapid digital transformation.
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