The European Central Bank (ECB) has expressed concerns regarding the increasing deregulation of financial markets in the U.S., particularly in relation to cryptocurrencies. In a memo from its January meeting, the ECB evaluated the risks associated with the Trump administration’s more lenient stance on crypto assets. The bank warned that this shift could lead to “a further financial stability risk related to the prospect of a more deregulated financial system in the United States, including in the realm of crypto-assets,” which may potentially set the stage for a future financial crisis.
Recent trends indicate a relaxation of oversight in the crypto sector, highlighted by the Securities and Exchange Commission (SEC) dropping several significant cases against crypto exchanges. Despite this, ECB officials have consistently criticized cryptocurrencies like Bitcoin for failing to meet the criteria necessary to be classified as reserve assets. ECB President Christine Lagarde stated in January that reserve assets must be “liquid, secure, safe, and not plagued by the suspicion of money laundering,” asserting that Bitcoin would not be included in the reserves of any European central banks.
Isabel Schnabel, a member of the ECB executive board, further emphasized that the bank is unlikely to purchase Bitcoin in the future. During her remarks in 2024, she characterized BTC as “a speculative asset that does not fulfill the characteristics of money.” This perspective underscores the ECB’s cautious approach to cryptocurrencies amid an evolving regulatory landscape.
