Czech $7B Bitcoin reserve proposal sparks criticism over BTC volatility
2025-01-30
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As the Czech National Bank (CNB) is set to address a proposal on setting up a $7 billion Bitcoin reserve, the Czech Finance Minister has expressed concerns about the potential move.
Czech Finance Minister Zbynek Stanjura has warned against CNB’s proposal to consider investing up to 5% of its reserves in Bitcoin BTCUSD, Bloomberg reported on Jan. 30.
The official specifically cautioned against Bitcoin’s highly volatile nature, which does not align with the stability promised by central banks.
“The central bank should symbolize stability. If you look at Bitcoin trading, it’s definitely not a stable asset,” Stanjura reportedly said.
CNB to vote on Bitcoin reserves today
According to the Financial Times, CNB Governor Aleš Michl is expected to propose his Bitcoin acquisition plan to the bank’s board meeting on Jan. 30.
Should it be approved, the CNB could potentially hold at least $7 billion in Bitcoin, given the central bank’s total reserves of more than $146 billion.
While proposing the Bitcoin acquisition plan, Michl acknowledged Bitcoin’s high volatility. However, the CNB governor highlighted wider investor interest in Bitcoin after companies like BlackRock launched BTC exchange-traded funds last year.
“Bitcoin has significant volatility, which makes it harder to take advantage of its current low correlation with other assets,” Michl said in a statement on X on Jan. 29.
“That’s why I will ask our team on Thursday to further assess Bitcoin’s potential role in our reserves. Nothing more, nothing less,” he added.
Michl also noted that there’s no imminent decision as “thoughtful analysis is needed.”
Local industry firms welcome the potential move
Major industry firms in the Czech Republic have welcomed Michl’s proposal as it reflects a forward-thinking strategy to diversify away from the euro and embrace Bitcoin's long-term potential.
“The Czech Republic has long been a leader in Bitcoin innovation — home to the first mining pool, the first hardware wallet, and one of the largest Bitcoin conferences in the world, held annually in Prague,” Trezor analyst Lucien Bourdon told Cointelegraph.
While some might argue that Bitcoin allocations by global central banks is not the cryptocurrency’s original mission, Bourdon doesn’t believe that’s the case.
“Rather than centralization, this reflects Bitcoin’s growing role as a reliable asset in an evolving financial system,” Bourdon said, adding:
The news comes amid United States lawmakers actively pushing strategic Bitcoin reserve initiatives both in multiple states and on the federal level.
On Jan. 29, Senator Cynthia Lummis pushed the US to make a decision to adopt a strategic Bitcoin reserve ahead of the Czech Republic.
Meanwhile, European Central Bank President Christine Lagarde on Jan. 30 said she was confident that Bitcoin would not enter reserves in the European Union.