Old Europe reserved on Trump’s Bitcoin reserve order

European leaders remained largely passive to the news about America’s so-called “Fort Knox for digital gold,” having already nixed the idea of a Bitcoin reserve in the past weeks and months. Some in the East suggested, however, that European nations should have their own Bitcoin vaults.

While the market’s reaction revealed certain disappointment that the state isn’t going to buy more digital assets now, Trump’s move fulfills a campaign promise and is likely to ultimately benefit the crypto space. On Friday, the president welcomed industry players at a summit in the White House, a first, after banning the issuance of a “digital dollar” earlier this year.

Hardly any of Donald Trump’s initiatives since his return to power in America have been met with great enthusiasm in Europe so far, at least in the corners of the Old Continent that lie the closest to the New World. Some of those, his push for peace in Ukraine for example, or his protectionist tendencies, have caused transatlantic rifts.

Lagarde’s ‘good conversation’ fails to dissuade Czech counterpart from assessing Bitcoin reserve

In the past couple of months, it has become obvious that the moods are not the same on both sides of the Pond when it comes to the treatment of cryptocurrencies and financial innovation. At the end of January, the President of the European Central Bank (ECB), Christine Lagarde, made it clear she isn’t keen on adding Bitcoins to central bank reserves.

“I think there is a view around the table of the Governing Council, and most likely the General Council as well, 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,” she declared at a press conference in Frankfurt.

Lagarde was asked to comment on Trump’s support for a strategic Bitcoin reserve in the U.S. and also her Czech counterpart’s attempt to conduct an assessment of the inclusion of BTC into his country’s foreign currency reserves. “I am confident that bitcoin will not enter the reserves of any of the central banks of the General Council,” the ECB chief insisted after having what she called a “good conversation” with her colleague in Prague.

Aleš Michl, governor of the Czech National Bank (CNB) and former investment banker, had revealed to the Financial Times his intention to propose diversifying the institution’s reserves by allowing it to keep up to 5% of its €140 billion in BTC. While recognizing some European concerns associated with the digital asset, he pointed to the changing investment and regulatory attitudes across the ocean before eventually officially submitting his proposal at a meeting of the bank’s board.

Studying Bitcoin is not harmful, CNB Governor insists

The Czech Republic, an EU member-state participating in the ECB’s General Council, is not part of the eurozone and Michl sees no reason to join right now. His proposal to “analyze the possibility of creating a bitcoin test portfolio” was approved by the CNB board members on January 30.

“Studying bitcoin won’t harm us—on the contrary, it will strengthen us,” Michl stated in a post on X in February, emphasizing “the need to adapt to changing conditions in the financial markets and to explore new reserve management options.”

Bitcoin Update:
I’ll start broadly: if you intend to invest in crypto assets, exercise extreme caution. The market is still in its infancy. I remember the 1990s in our country, when the transition from socialism to capitalism saw the birth and simultaneous collapse of many… https://t.co/UxGF0R7NwO

— Aleš Michl (@MICHLiq_) February 19, 2025

In neighboring Poland, another Central-European nation remaining outside the eurozone, a runner in the upcoming presidential election replicated Donald Trump’s campaign promise by pledging to set up a Bitcoin reserve if he wins the race.

Sławomir Mentzen, the candidate of the nationalist “Konfederacja” alliance, who is ranking third in the polls ahead of the May vote, took to X in November to offer to turn Poland into a “cryptocurrency haven, with very friendly regulations, low taxes, and a supportive approach from banks and regulators.”

Poland should create a Strategic Bitcoin Reserve.

If I become the President of Poland, our country will become a cryptocurrency haven, with very friendly regulations, low taxes, and a supportive approach from banks and regulators.

BTC to the Moon! pic.twitter.com/izKc4spkkV

— Sławomir Mentzen (@SlawomirMentzen) November 17, 2024

Old Europe isn’t having any of these crypto-friendly leanings

“This is not something central banks should look at. This is not a liquid form of something you want on the balance sheet,” Joachim Nagel, who heads Germany’s central bank, was quoted as stating after a lecture organized by the London-based think-tank Official Monetary and Financial Institutions Forum (OMFIF).

During a discussion with the audience, he denied Bitcoin the status of a currency, according to a press release in mid-February detailing his views on a number of issues, including the “crypto-friendly leanings” of the new administration in the United States.

Add to that Francois Villeroy de Galhau’s description of Trump’s push for financial deregulation as “dangerous” for banks and other financial service providers, including crypto firms. In an interview with the Alternatives Économiques magazine, also quoted by Politico last month, the Banque de France governor warned about a “big risk” for financial stability.

Citing concerns similar to those expressed by counterparts across Western Europe, Swiss National Bank (SNB) Chairman Martin Schlegel announced earlier in March that the SNB is unlikely to hold Bitcoins in its reserves. The digital assets “do not fulfill the essential characteristics of a good currency,” he told Switzerland’s Tamedia press group, according to the Central Banking information portal.

Russia’s wealth to be kept in gold and yuan, for now

In the Russian Federation, right across the new-old “iron curtain” for lack of a more contemporary term, it’s unlikely to have either a definitive ‘yes,’ or a categorical ‘no’ to the suggestion that the state should have a Bitcoin reserve or store other crypto assets.

The Ministry of Finance “has not heard about the creation of a strategic reserve of cryptocurrencies in Russia,” according to a report by the Tass news agency, quoting Deputy Finance Minister Vladimir Kolychev. Speaking to journalists at the State Duma last Tuesday, he also noted, “this is more of a question for the Central Bank.”

Kolychev then remarked that his department is not planning to alter the investment structure of the National Wealth Fund (NWF), Russia’s sovereign wealth fund. “No. Gold and yuan,” the Minfin official stated, as per an Interfax report. The NWF’s regulatory structure currently allocates up to 60% to the Chinese currency and up to 40% to the precious metal.

However, Kolychev left the door open to future crypto investments. He explained that the fund’s concept is to accumulate 7% to 10% of GDP in risk-free and liquid assets. Once that goal is reached, the ministry could potentially think about more profitable assets, including cryptocurrency, he said.

In December, a lawmaker from the “New People” party, Anton Tkachev, appealed to Finance Minister Anton Siluanov to assess the feasibility of establishing a strategic Bitcoin reserve in Russia. He pointed to the volatility of traditional currencies in times of geopolitical instability, sanctions and inflation.

Tkachev’s try came after earlier that month, Russian President Vladimir Putin accused the previous administration in Washington of undermining the U.S. dollar as a reserve currency, forcing other nations to seek alternatives. He gave Bitcoin as an example of such an asset, noting it cannot be regulated.

‘Nature doesn’t like vacuum’, Christine Lagarde knows that

Meanwhile, the monetary authorities in Russia, China and Europe have been advancing with the implementation of digital versions of their respective fiat currencies. Analysts, quoted by Reuters in January, think that by ditching the digital dollar, the United States is effectively giving its competitors the lead in this race and deepening the geopolitical divide over central bank digital currencies (CBDCs).

“Nature doesn’t like vacuum,” Christine Lagarde recently stated, urging EU institutions to speed up the legislative process “so that we eventually not put to bed but put to reality this digital euro”. The deadline is October, she added, more than five years after officials in the eurozone started talking about a common digital currency.

The project to digitalize the euro has been met with concerns by critics, including over privacy and debanking. Sarah Knafo, a member of the European Parliament from the French nationalist Reconquête party, exclaimed on X in December: “NO to the digital euro, YES to a strategic national reserve of BITCOIN.” Addressing other MEPs, she also warned the CBDC could lead to a “dystopian world” and highlighted Trump’s crypto-friendly approach in contrast.

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