Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

European Central Bank Should Consider Bitcoin Reserve, Former German Finance Minister Says

BY Benzinga | ECONOMIC | 12/30/24 10:16 AM EST

Christian Lindner, the former German Finance Minister and current leader of the Free Democratic Party (FDP), has called for the European Central Bank and the Bundesbank to consider adding cryptocurrencies like Bitcoin (CRYPTO: BTC) to their reserves.

What Happened: “The new Trump administration is pursuing an extremely progressive policy on crypto assets like Bitcoin,” Lindner said, according to a report by Handelsblatt on Monday.

Lindner emphasized that while the ECB and Bundesbank are independent in their decision-making, “Germany and Europe must not allow themselves to fall behind again.”

He suggested that Frankfurt, where the ECB and Bundesbank are headquartered, should examine whether crypto assets should become part of central bank reserves, potentially strengthening their resilience.

Also Read: Ethereum To Outperform Bitcoin In Q1 2025 For These 3 Reasons, Whale Trader Says

Why It Matters: This proposal follows Republican Senator Cynthia Lummis‘ proposal of a “Strategic Bitcoin Reserve,” which involves the government purchasing 200,000 Bitcoins annually for five years.

President-elect Donald Trump is reportedly considering an executive order to establish such a reserve.

The idea of central banks holding cryptocurrencies is not without controversy. Critics point to the volatility of crypto assets and potential risks to financial stability.

Lindner argues that as a decentralized system, political risks associated with cryptocurrencies are calculable, comparing them to fluctuations in traditional assets like precious metals.

The push for cryptocurrency reserves represents a growing recognition of digital assets’ role in the global financial system, Lindner says, noting that “crypto assets now represent a significant portion of global wealth growth.”

Read Next:

  • Bitcoin, Dogecoin Trail These 2024 Crypto Champions: Here Are The Top Performers Of The Year

Image: Shutterstock

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article