Key Takeaways
- The ECB will assess risks if national banks hold Bitcoin in reserves.
- Czech National Bank is considering adding Bitcoin to its reserves.
- ECB officials argue Bitcoin lacks intrinsic value compared to gold.
The European Central Bank is considering evaluating its partnerships with national banks that choose to hold Bitcoin reserves, according to ECB board member Piero Cipollone.
Risk assessment framework
In a Feb. 6 interview, Cipollone stated that any central bank adding Bitcoin to its holdings would face risk management assessments concerning repurchase agreements (repo) and swap lines.
He suggested that the ECB might decide whether to maintain ties with such banks after conducting these evaluations.
Cipollone said:
We would need to do a risk management assessment of that. Let’s see if any central bank enters this space because I don’t fully see the rationale for it. We will assess it at that point in time, if it happens.
ECB’s position on Bitcoin
Cipollone reiterated the ECB’s skepticism toward Bitcoin’s role as a reserve asset, arguing that it lacks intrinsic value and relies on speculative price appreciation.
He dismissed comparisons to gold, pointing out that gold has historical, industrial, and commercial value, whereas Bitcoin does not.
Impact on national banks
His remarks come as the Czech National Bank explores the potential inclusion of Bitcoin in its reserves.
However, ECB President Christine Lagarde has expressed confidence that the CNB and other European central banks will likely reject Bitcoin as a reserve asset.
