The Czech National Bank is exploring a 5% Bitcoin allocation in its reserves, signaling growing acceptance of cryptocurrencies in national financial strategies.
By Anisha Pandey
Edited by Marco T. Lanz
Updated
3 mins read
The Czech National Bank (CNB), the central financial authority of the Czech Republic, has announced a strategic review to evaluate the feasibility of investing in new asset classes, including Bitcoin BTC $83 640 24h volatility: 5.0% Market cap: $1.66 T Vol. 24h: $39.97 B . This potential move, initiated by Governor Aleš Michl, signals a possible shift toward incorporating cryptocurrencies into national reserves, a first for any central bank globally.
“The CNB has been diversifying its investments over the past two years as part of its reserve management strategy,” the bank confirmed in a statement. Governor Michl noted the need to assess whether Bitcoin could serve as a valuable diversification tool, enhancing returns without compromising stability.
At our meeting on Thursday, after discussing a document on international reserve management in 2024, the Bank Board of the Czech National Bank (CNB) approved a proposal to analyse the options for investing in additional asset classes.
The central bank has been increasingly…— Aleš Michl (@MICHLiq_) January 30, 2025
Currently, the bank holds reserves amounting to around $146 billion. On Wednesday, Michl told the Financial Times that he is considering allocating up to 5% of these reserves to Bitcoin. Historical models estimate that such an allocation could have increased returns by 3.5% annually over the past decade but would have doubled volatility levels.
Bitcoin analyst Lucien Bourdon from Trezor, a Czech-based hardware wallet manufacturer, called this development a “historic turning point.” He added, “If a nation successfully integrates Bitcoin into its reserves – self-custodied and outside of foreign regulatory control – it gains a hedge against monetary debasement and external economic pressure.”
While Michl acknowledged Bitcoin’s volatility, he highlighted growing institutional interest, particularly after asset management giant BlackRock filed for U.S. spot Bitcoin ETFs. He also referenced campaign promises from former President Donald Trump advocating crypto deregulation and strategic Bitcoin reserves.
Despite his enthusiasm, Michl warned that the investment might ultimately prove worthless, describing himself as “the one entering the jungle” compared to more conservative central bankers.
This exploration into Bitcoin investment follows recent legal amendments in the Czech Republic aimed at easing crypto taxation. As of January 1, 2025, individuals are exempt from personal tax on crypto transactions if annual gross income from such trades does not exceed CZK 100,000 or if assets are held for more than three years before sale.
The CNB’s potential move mirrors growing interest among global financial institutions. Notable players like J.P. Morgan have already introduced blockchain initiatives such as Onyx and the JPM Coin, while BNY Mellon now offers crypto custody services. Deutsche Bank has also partnered with Bitpanda to facilitate the integration of digital assets into mainstream finance.
Bitcoin price performance and the regulatory approval for spot Bitcoin ETFs in 2024 has further fueled institutional interest, with the asset surging 145% over the past year. Notably, the largest cryptocurrency is currently trading at $105,900 with a market cap of $2.09 trillion.
If the CNB proceeds with its Bitcoin investment strategy, it may pave the way for other central banks to rethink their stance on cryptocurrency.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
With a background in finance and a passion for innovation, Anisha has been covering the ever-evolving world of crypto for over four years. Her deep understanding of the crypto market have made her a trusted source for analysis and news. Whether it's dissecting the latest trends or decoding whitepapers, Anisha is dedicated to bringing clarity to the world of digital assets.
