The Czech National Bank (CNB) is considering a groundbreaking move to include bitcoin in its reserves, potentially making it the first Western central bank to adopt the cryptocurrency for such a purpose. Governor Ales Michl confirmed that the proposal is under analysis but emphasised that no immediate decisions are expected.
Central banks traditionally favour conservative assets like gold, bonds, and foreign currencies in their reserves, and some have expressed scepticism about cryptocurrencies due to their volatility and risks. Michl, however, has spearheaded diversification efforts at the CNB since his appointment in 2022, including gradual gold acquisitions and an increased focus on equities to ensure sustainable profits.
Michl plans to present the bitcoin proposal to the bank’s board, suggesting that up to 5% of the CNB’s €140 billion ($146 billion) reserves could eventually be allocated to the cryptocurrency. He acknowledged bitcoin’s volatility and noted that further analysis is necessary to determine its potential role in the bank’s portfolio.
Bitcoin has seen growing acceptance among investors, especially after the launch of bitcoin exchange-traded funds by firms like BlackRock. Michl highlighted this rising interest, describing bitcoin as an alternative investment with the potential for either negligible value or “absolutely fantastic” returns. The cryptocurrency reached record highs earlier this month, buoyed by U.S. President Donald Trump’s pro-crypto stance and initiatives such as a national cryptocurrency stockpile.
Despite its popularity among private investors, bitcoin faces resistance as a reserve asset. The European Central Bank (ECB) has dismissed it as a speculative bubble and unsuitable for public reserves. Similarly, the Swiss National Bank and South Africa’s central bank have expressed skepticism, citing concerns about bitcoin’s risk profile and market concentration.
Michl also indicated that the CNB is likely to cut interest rates by 25 basis points next week, resuming an easing cycle paused in December. While the bank’s potential move into bitcoin would mark a significant departure from conventional central bank strategies, it remains subject to extensive review and debate.
