Czech central bank considers billions in Bitcoin reserves

Czech National Bank Governor Aleš Michl proposes investing billions in Bitcoin, aiming to diversify reserves and make CNB the first major central bank to hold it.

Czech National Bank Governor Aleš Michl is pushing for a historic move—investing billions of Euros in Bitcoin as part of the country’s public reserves, according to the Financial Times.

Michl plans to present the proposal to the central bank board, aiming to diversify the Czech National Bank's (CNB) reserves. If approved, the bank could allocate up to 5% of its total reserves —which currently stand at 140 billion euros—towards Bitcoin. This would mark a significant step in crypto adoption, making the CNB the first major central bank to officially hold Bitcoin.

While acknowledging Bitcoin’s volatility and limited history, Michl pointed to growing institutional interest, particularly after the launch of BlackRock’s spot Bitcoin ETFs. He also highlighted former U.S. President Donald Trump’s pro-crypto stance and the increasing influence of crypto advocates in his administration.

The CNB already stands out from other central banks due to its unconventional investment strategy. Unlike most central banks that primarily hold stable assets like government bonds and cash, the CNB has 22% of its portfolio in equities, making it more open to higher-risk investments.

Trump recently signed an executive order calling for a national framework for crypto regulation and a digital asset reserve. However, Bitcoin was not specifically mentioned in the order.

Michl’s position is in sharp contrast with other central bankers, many of whom have dismissed Bitcoin as an unreliable store of value. Federal Reserve Chair Jerome Powell recently stated that the Fed has no intention of holding Bitcoin. Similarly, the European Central Bank has continued to argue that Bitcoin’s fair value is zero and remains unsuitable for payments or investment.

Meanwhile, El Salvador, the first country to adopt Bitcoin as legal tender in 2021, has scaled back its plans as part of a debt relief deal with the International Monetary Fund.

Despite skepticism from traditional financial institutions, Bitcoin has reached record highs, surpassing $100,000 after Trump’s election victory. It was also the best-performing asset in 2024, significantly outpacing major stock indices like the Nasdaq.

If Michl’s proposal gains approval, it could set a precedent for other central banks and further legitimize Bitcoin as a reserve asset. The financial world is now watching closely to see if the CNB will take this historic step.