ECB Cuts Rates While Rejecting Bitcoin as a Reserve Asset

The European Central Bank (ECB) has reduced its deposit rate to 2.75%, marking its fifth cut since June in an effort to stimulate a sluggish eurozone economy.

While inflation remains slightly above the 2% target, the ECB maintains that the disinflation process is on track and hinted at the possibility of further easing.

Despite some signs of recovery, slow wage adjustments and lingering price pressures continue to weigh on the economy. However, wage growth is moderating, and corporate profit margins are helping absorb inflationary effects.

The ECB’s decision comes amid concerns over global trade policies, particularly potential tariffs from U.S. President Donald Trump’s administration. While sweeping tariffs haven’t materialized yet, ongoing trade tensions could complicate economic stability.

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Meanwhile, the U.S. Federal Open Market Committee (FOMC) opted to keep interest rates unchanged at 4.25%-4.5% in its first policy meeting of 2025, aligning with market expectations.

During a press conference, ECB President Christine Lagarde dismissed the idea of Bitcoin being included in central bank reserves, citing concerns over money laundering and illicit financial activities. She reaffirmed that no ECB member bank would consider Bitcoin as a reserve asset.

Alexander Zdravkov