Czech National Bank Approves Proposal to Assess Bitcoin and Other Asset Investments
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In a latest development, 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 CNB noted in a statement that the central bank has been increasingly diversifying its investments over the last two years as part of its reserve management strategy.“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,” it noted.
Board to Decide Next Steps After Analysis
The board said that it will decide on next steps after analyzing the situation, with no changes until then. Any changes in the reserve portfolios will be disclosed in the quarterly information on the CNB’s international reserves and in the CNB’s annual report. Remarkably, if Bitcoin is added, the CNB would be the first central bank to hold it.
CNB Governor Aleš Michl recently announced plans to introduce a BTC reserve, calling it a game-changer. The national bank aims to invest at least 5% of its €140bn reserves in Bitcoin. Michl acknowledged Bitcoin’s volatility and short history but pointed out the growing investor interest following the launch of U.S. spot Bitcoin ETFs by BlackRock and other firms, as well as President Trump’s promises on crypto deregulation and creating a Bitcoin reserve.
Concerns Over Bitcoin’s Volatility And Security
However the Finance Minister had voiced concerns about Bitcoin’s instability and volatility. He argued that Bitcoin is unsuitable as a national reserve due to its highly volatile nature and emphasized that the government cannot override the CNB’s decisions.
Besides, European Central Bank President Christine Lagarde also said on Thursday that Bitcoin is not a viable option for central bank reserves in the Eurozone, citing issues with liquidity, security, and regulation. The Czech Republic, however, is not part of the Eurozone.
Nevertheless, the Czech National Bank’s move to explore Bitcoin as part of its reserve strategy marks a bold step toward diversification. The decision will be carefully analyzed, and if approved, it could set a precedent for other central banks, with the CNB potentially becoming the first to hold Bitcoin in its reserves.
