Czech central bank approves proposal to assess investing reserves in bitcoin
2025-01-30
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The board of the Czech National Bank approved a proposal on Thursday to analyze the options for investing in additional asset classes, including bitcoin.
“The central bank has been increasingly diversifying its investments over the last two years as part of its reserve management strategy,” the CNB said in a statement. “At the proposal of Governor Aleš Michl, the CNB is to assess whether it would be appropriate in terms of diversification and return to include other asset classes in the reserves as well.”
The board said it would decide next steps based on the analysis, with no changes made until then. Any new reserve portfolio investments will then be disclosed in its quarterly and annual reports. If a bitcoin allocation is approved, the CNB would become the first central bank known to hold the foremost cryptocurrency.
Up to 5% potential bitcoin allocation
On Wednesday, Governor Michl told the Financial Times he planned to submit a plan to allocate as much as 5% of its €140 billion ($146 billion) reserves to bitcoin to the central bank’s board on Thursday.
The CNB has estimated that holding 5% of its foreign reserves in bitcoin over the past decade would have boosted annual returns by 3.5% but doubled their volatility.
Speaking to the FT, Michl acknowledged bitcoin’s volatility and limited record but highlighted increased investor interest since BlackRock and other asset managers launched U.S. spot Bitcoin exchange-traded funds and President Trump’s campaign pledges on crypto deregulation and the creation of a bitcoin strategic stockpile.
The CNB Governor also noted he had a “totally different philosophy” on bitcoin compared to most of his counterparts. “Of course, if you compare my position with other bankers, then I’m the one entering the jungle, or the pioneer,” Michl said on Wednesday. “I used to run an investment fund, so I’m a typical investment banker I would say, I like profitability.”
The central bank chief added that more central banks could follow his lead over the next five years but also warned that the investment could end up proving worthless.
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