Czech National Bank Explores Bitcoin as Reserve Asset

By adding Bitcoin to the Czech National Bank’s (CNB) reserves, Governor Aleš Michl is contemplating a radical change in the bank’s asset strategy. The coin might receive up to 5% of CNB’s €140 billion reserves if it is authorized.

Michl’s Bold Proposal for Diversification

Michl plans to present this proposal to the CNB board on January 30, emphasizing Bitcoin’s potential as a diversification tool. Speaking to the Financial Times, he acknowledged Bitcoin’s volatility but highlighted growing institutional interest, especially after BlackRock launched spot Bitcoin ETFs in 2024.

“Of course, if you compare my position with other bankers, then I’m the one entering the jungle, or the pioneer,” Michl stated. “I used to run an investment fund, so I’m a typical investment banker I would say, I like profitability.”

Michl acknowledges the risks, but according to CNB data, yearly profits would have climbed by 3.5 percentage points over the previous ten years if 5% of reserves had been in Bitcoin, despite the fact that volatility would have doubled.

According to Bitcoin Treasuries, if authorized, CNB would become the first central bank in the West to hold Bitcoin, joining El Salvador, which now has 6,048 BTC valued at about $619 million.

As Bitcoin becomes more accepted by banks, Michl’s suggestion suggests a possible change in central banking. The ruling might establish a standard for other banks thinking about investing in digital assets.