The Czech National Bank considers Bitcoin as a diversification tool for reserves, in the context of Bitcoin's price increasing by over 131% in the past year.
The Governor of the Czech National Bank (CNB), Mr. Aleš Michl, recently hinted at the possibility of using Bitcoin to diversify foreign exchange reserves, reflecting the growing interest of governments in cryptocurrency. In an interview with CNN Prima News on January 5, Mr. Michl stated that the CNB is considering buying 'a few Bitcoins,' although he emphasized that this would not be a large investment. This move comes amid Bitcoin's impressive growth of over 131% in the past year, far exceeding gold's 30% increase.
However, any investment decision into Bitcoin requires the approval of the CNB's seven-member board. According to board advisor Janis Aliapulios, the bank currently has no specific plans to invest in Bitcoin. Mr. Aliapulios confirmed: 'Currently, the CNB is not considering purchasing cryptocurrency assets for its reserves. However, Governor Michl does not rule out the possibility of further discussions on this topic in the future.'
Mr. Aliapulios also stated that the CNB is prioritizing the diversification of reserves with gold, aiming to increase the gold ratio to about 5% of total assets by 2028.
BTC and gold, 1-year chart. Source: Cointelegraph/TradingView Impact and challenges
The CNB's consideration of Bitcoin as a foreign exchange reserve tool marks a new step in the context of countries seeking diversified investment solutions. While Bitcoin offers high profit potential, its strong price volatility also poses significant challenges.
Blockchain expert Anndy Lian describes Bitcoin as a 'double-edged sword' for national reserve funds, as Bitcoin's price volatility could cause widespread financial instability. Mr. Lian stated: 'If Bitcoin becomes part of national reserves, this could fundamentally change the landscape of global finance, promoting more decentralized and digital approaches to economic stability.'
The trend of considering Bitcoin as a reserve asset is also spreading in the U.S. The Bitcoin Act, proposed by Wyoming Senator Cynthia Lummis, aims to establish a strategic Bitcoin reserve fund. This bill is receiving significant support, especially following the victory of President-elect Donald Trump and the Republican Party's majority in the Senate.
Lummis Bitcoin Act. Source: Lummis.senate.gov
According to Anastasija Plotnikova, co-founder and CEO of Fideum, bipartisan consensus could facilitate the passage of the bill in the next four years.
Several states in the U.S. have taken the lead in exploring the potential of Bitcoin. Pennsylvania has passed the Strategic Bitcoin Reserves Act, while Texas is also considering similar proposals. Adam Back, founder of Blockstream and one of the leading cryptographers, predicts that Bitcoin's price could exceed $1 million if the Bitcoin Act is passed, marking a significant milestone in the history of cryptocurrency.
