Germany's central bank chief, Joachim Nagel, has reinforced his scepticism towards Bitcoin, dismissing it as unsuitable for central bank reserves. Speaking at an event hosted by the London School of Economics, Nagel argued that Bitcoin is not a genuine currency but rather an asset class lacking liquidity and security. He also criticised the pro-crypto stance of former US President Donald Trump, particularly proposals to establish a strategic Bitcoin reserve. Comparing Bitcoin to the Dutch Tulip Mania of the 17th century, he warned of its speculative nature and volatility.

In contrast, Nagel is a strong advocate for the digital euro, highlighting its potential to strengthen Europe's financial sovereignty. He cautioned that reliance on private sector payment solutions, particularly from US firms, could expose Europe to geopolitical risks. While the long-term effects of central bank digital currencies (CBDCs) on interest rates remain uncertain, he emphasised their importance in ensuring a resilient financial system.

Meanwhile, the US is shifting its regulatory approach to cryptocurrency. Under Acting SEC Chair Mark Uyeda, new policies have allowed banks to re-enter the crypto custody sector. The SEC recently replaced its restrictive guidance, paving the way for regulated financial institutions to hold digital assets. As these developments unfold, Bitcoin is currently trading at$96,318, marking a slight decline over the past week.