Czech National Bank to Invest in Bitcoin

Czech National Bank Eyes Bitcoin Investment in Reserves

The Czech National Bank (CNB) may become the first Western central bank to invest in Bitcoin, as Governor Aleš Michl plans to propose allocating up to 5% of the bank’s €140 billion in reserves to the digital asset.

A Bold Move in Diversification Efforts

Michl’s proposal, set to be presented to the CNB board on January 30, aims to diversify the bank’s assets and capitalize on the growing investor interest in Bitcoin. The CNB governor acknowledged the cryptocurrency’s volatility but pointed to its rising appeal, particularly after BlackRock launched spot Bitcoin exchange-traded funds in 2024.

“Of course, if you compare my position with other bankers, then I’m the one entering the jungle, or the pioneer. I used to run an investment fund, so I’m a typical investment banker I would say, I like profitability.”

Michl admitted that Bitcoin’s value could potentially drop to zero, but also highlighted its potential benefits. According to CNB data, if 5% of its reserves had been invested in Bitcoin over the past decade, annual returns would have risen by 3.5% points. However, this would also have resulted in doubled volatility.

Potential Impact and Global Precedents

If the proposal is approved, the CNB could join El Salvador, which holds 6,048 Bitcoin worth approximately $619 million, in investing in the digital asset. The United States is also evaluating the feasibility of a “national digital assets stockpile,” although President Donald Trump’s executive order does not suggest prioritizing Bitcoin in its reserves.

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