| Social media was buzzing this week with news the Czech Republic Central Bank was considering adding Bitcoin to its reserves.[1] |
| The Czech National Bank (CNB) released a statement saying it was looking into, ‘additional asset classes’.[2] No mention of Bitcoin, yet. |
| Then, the head of the CNB, Aleš Michl published this on X.com,[3] |
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| If the CNB did this, it would be the first European Union country to make a decisive move on Bitcoin. They would be ‘front running’ the U.S. as the manyposts would have you believe. |
| But that was Wednesday. |
Lagarde Describes…?
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| On Thursday… |
| The European Central Bank held a pre-planned press conference. During question time, President of the ECB, Christine Lagarde, was asked a question about the CNB’s plans. It also added whether reserves of European central banks should include Bitcoins in their reserves. |
| Lagarde’s response was… confusing, |
| ‘I think there’s a view around the table of the governing council … that reserves have to be liquid, that reserves have to be secure, that they have to be safe, that they should not be plagued by the suspicion of money laundering or other criminal activities.’ |
| Is she describing the Euro or Bitcoin there? |
| She also went on to say, |
| ‘I’m confident that Bitcoins will not enter the reserves of any of the central banks of the general council’.[4] |
| ‘I had a good conversation with my colleague from the Czech Republic… I’m confident he’s convinced, as we all are, of the necessity to have liquid, secure and safe reserves.’ |
| The indication seemed to be Lagarde read Michl the riot act, likely reminding him the Czech Republic is a net recipient of €2.78 billion from the EU.[5] |
| Michl’s idea isn’t bad though. In fact, in keeping with Lagarde’s comments, she accidentally outlined why Bitcoin is a better reserve asset to hold than fiat currency. |
The Fiat vs. Bitcoin Checklist
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| Here’s a check list of the difference between fiat currency and Bitcoin to see how Lagarde’s comments stack up. |
Fiat currency (Euros, Dollars, Pounds, etc.)
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- Liquid? Yes
- Secure and safe? Sort of. It’s very difficult to counterfeit the Euro. But it can be (and does get) stolen.
- Prone to money laundering and criminal activity? Let’s look at the facts. The United Nations Office on Drugs and Crime estimate 2% to 5% of global GDP is laundered each year.[6] With global GDP at around $100 trillion, that’s around $2 trillion to $5 trillion every year is laundered with fiat currency.
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Bitcoin
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- Liquid? Not as liquid as fiat money, but still tens of billions in trading volume, and hundreds of thousands of transactions per day.
- Secure and safe? Yes. The transparency and immutability of Bitcoin’s blockchain makes it robust, and secure. Safety is no different to fiat currency.
- Prone to money laundering and criminal activity? Let’s look at the facts. Estimates are around $22 billion was laundered through cryptocurrency in 2023 (that was down from 2022 levels) which works out at 0.022% of global GDP.[7]
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| Based on Lagarde’s view of what makes a good reserve asset, should we be expecting the EU to be adding Bitcoin to their reserves? |
| Probably not. |
| However, with the U.S. imminently adding Bitcoin to their federal reserves, and a growing number of U.S. states looking to add Bitcoin too, maybe it isonly a matter of time until the EU wakes up as well… |
Trust in crypto,
Adam Atlantic |
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Don’t Miss This…
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| Profit was down year on year, deliveries of Teslas were down, all in all it was down, down, down. Except one thing was up, up, up. Its Bitcoin holdings. Read more here… |
| Saylor has used equity and debt to load up on Bitcoin so far and has 471,107 Bitcoin in the company coffers. So, what is STRK, and why is Saylor spinning up an all-new way to buy more Bitcoin? Read more here… |
| The riskiest market in the world is contained within the broader crypto market – the memecoin roulette. But I can tell you this, if the stock market was down, and the larger cap crypto were all down, there was one thing that wasn’t down…memecoins. Read more here… |
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| [1] https://x.com/WatcherGuru/status/1884994666870792413 |
| [2] https://www.cnb.cz/en/cnb-news/press-releases/CNB-to-assess-options-for-broadening-investment-to-include-other-asset-classes/ |
| [3] https://x.com/MICHLiq_/status/1884531521475805444 |
| [4] https://x.com/fabthefoxx/status/1884984139465515245 |
| [5] https://www.euronews.com/business/2024/12/09/eu-budget-who-pays-the-most-into-the-eu-and-who-gains-the-most |
| [6] https://www.europol.europa.eu/crime-areas/economic-crime/money-laundering |
| [7] https://www.ukfinance.org.uk/news-and-insight/blog/do-digital-currencies-and-cryptocurrencies-pose-higher-risk-money-laundering |
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