In a groundbreaking move, Czech National Bank (CNB) Governor Aleš Michl has proposed investing a portion of the bank’s reserves in Bitcoin, marking a potential first for a Western monetary institution. If approved, the CNB could allocate up to 5% of its €140 billion in reserves to the cryptocurrency, signaling a shift in traditional central banking strategies.
The Czech National bank has €140 billion in foreign exchange reserves, which comprise about 45% of the Czech Republic’s GDP.
Michl highlighted the growing demand for Bitcoin, particularly following the entry of major financial institutions like BlackRock into the cryptocurrency market with Bitcoin exchange-traded funds (ETFs). He also pointed to the deregulatory stance of U.S. President Donald Trump and the increasing influence of cryptocurrency executives on his administration as factors contributing to the appeal of Bitcoin as a reserve asset.
The proposal comes at a time when central banks worldwide are actively debating the risks and benefits of investing in digital assets. While proponents argue that Bitcoin can serve as a hedge against inflation and monetary instability, critics warn of its volatility and regulatory uncertainties.
Currently, the CNB holds €140 billion in foreign exchange reserves, equivalent to approximately 45% of the Czech Republic’s GDP. If the plan moves forward, it could set a precedent for other central banks exploring alternative assets for reserve diversification.
The proposal is expected to spark discussions within the CNB and among financial policymakers. If approved, it could mark a historic moment in the integration of cryptocurrencies into mainstream monetary policies.
