Czech National Bank Governor Aleš Michl is advocating for a groundbreaking investment in Bitcoin. He plans to propose that the bank invest billions of euros in Bitcoin as part of its public reserves.
This move aims to diversify the Czech National Bank’s (CNB) reserves, which currently total 140 billion euros. If the proposal is approved, the CNB could allocate up to 5% of its reserves to Bitcoin. This would make the CNB the first major central bank to officially hold Bitcoin.
Michl recognizes Bitcoin’s volatility and limited history but notes the rising institutional interest in cryptocurrency. This interest has grown, especially after BlackRock launched its spot Bitcoin ETFs. Michl also mentioned the pro-crypto stance of former U.S. President Donald Trump and the increasing influence of crypto advocates in his administration.
The CNB is already different from other central banks. While most central banks invest in stable assets like government bonds, the CNB has 22% of its portfolio in equities, showing a willingness to take on higher risks.
Trump recently signed an executive order for a national framework for crypto regulation and a digital asset reserve, although Bitcoin was not specifically mentioned. Michl’s views contrast sharply with those of other central bankers.
Many have dismissed Bitcoin as an unreliable store of value. For instance, Federal Reserve Chair Jerome Powell stated that the Fed does not plan to hold Bitcoin. The European Central Bank has also argued that Bitcoin’s fair value is zero.
El Salvador, which made Bitcoin legal tender in 2021, has since reduced its plans due to a debt relief deal with the International Monetary Fund. Despite skepticism from traditional finance, Bitcoin has reached record highs, surpassing $100,000 after Trump’s election victory. It was also the best-performing asset in 2024.
