The debate over Bitcoin’s role in global finance has heated up after Christine Lagarde, President of the European Central Bank (ECB), firmly rejected the idea of Bitcoin (BTC) being used as a reserve asset by central banks.

According to Lagarde, Bitcoin lacks the necessary liquidity, security, and credibility to be considered a reliable reserve asset. She also suggested that BTC is too closely linked to criminal activity.

However, crypto analysts and industry leaders are challenging her claims, arguing that Bitcoin is not only highly liquid and secure but also one of the most transparent financial assets available today.

So, is Lagarde correct, or is the ECB underestimating Bitcoin’s potential?

Why Lagarde Dismisses Bitcoin as a Reserve Asset

During a recent press conference, Lagarde was asked about Bitcoin’s suitability as a reserve asset. She responded:

“Reserves have to be liquid, secure, and safe, and must not be linked to money laundering or criminal activity. For these reasons, I am confident that Bitcoin will not be included in the reserves of any central bank under the ECB’s jurisdiction.”

Her comments come at a time when some European countries are considering adding Bitcoin to their national reserves, including the Czech Republic.

But does Bitcoin truly fail to meet the requirements for a reserve asset? The crypto community doesn’t think so.

Bitcoin’s Liquidity: More Than Traditional Assets?

One of Lagarde’s biggest arguments against Bitcoin is that it isn’t liquid enough to serve as a reserve asset.

However, crypto analysts strongly disagree. Andre Dragosch, Head of Research at Bitwise Europe, compared Bitcoin’s liquidity to traditional financial assets and found surprising results.

“Is Bitcoin liquid? SPDR S&P 500 ETF (SPY) trades around $22 billion in volume per day. Bitcoin just had $54 billion in trading volume over the past 24 hours.”

These numbers suggest that Bitcoin is more liquid than many traditional assets—including stocks that central banks already hold in their reserves.

Bitcoin’s Security: The Strongest Network?

Lagarde also claimed that Bitcoin is not secure enough to be a reserve asset. However, crypto experts argue that Bitcoin’s decentralized nature makes it one of the most secure financial systems in the world.

Bitcoin is protected by a global network of miners that ensure transactions are verified correctly. To compromise the system, an attacker would need at least $20 billion in computing power, making it nearly impossible.

Unlike traditional banks, which can suffer from hacking and fraud, Bitcoin has never been hacked in its 15-year history.

Bitcoin and Crime: The Data Tells a Different Story

One of the most common arguments against Bitcoin is its connection to money laundering and illegal activities.

But blockchain analysis companies like Chainalysis have repeatedly shown that crypto-related crime makes up less than 1% of all transactions.

In fact, a 2024 Chainalysis report found that:

• Only 0.14% of Bitcoin transactions were linked to illicit activities.
• Traditional banks have facilitated far more money laundering cases than Bitcoin ever has.

Bitcoin transactions are fully traceable on the blockchain, making it much harder for criminals to use than cash or offshore bank accounts.

Czech Republic’s Interest in Bitcoin Drives ECB Backlash

Lagarde’s strong stance against Bitcoin comes at a time when some European countries are exploring BTC as part of their national reserves.

Recently, the Czech National Bank Governor, Ales Michl, stated that the country’s central bank is considering adding Bitcoin to its reserves, pending government approval.

After this declaration, betting odds on Polymarket for another country adopting Bitcoin briefly surged by over 70%, showing that many investors believe it’s only a matter of time before a country formally includes BTC in its reserves.

The big question now is: Will the Czech Republic push forward with Bitcoin despite ECB warnings?

Final Thoughts: Is Bitcoin’s Role in Central Bank Reserves Inevitable?

The ECB’s rejection of Bitcoin has reignited discussions about the future of crypto in global finance. While Christine Lagarde insists that BTC fails to meet liquidity, security, and trust standards, industry experts refute her claims with strong data.

Bitcoin’s high liquidity, strong security, and low crime rate make it an increasingly attractive option for central banks looking to diversify their reserves.

With countries like the Czech Republic openly considering Bitcoin, the next few years could see more central banks forced to rethink their stance on digital assets.

So, will Bitcoin eventually find its place in global reserve systems, or will central banks continue to resist its adoption? Only time will tell.