The Czech National Bank (CNB) Assess Bitcoin for International Reserves
Czech National Bank will evaluate adding Bitcoin to its reserves, potentially becoming the first Western central bank to do so.
The Bank Board of the Czech National Bank (CNB) has approved a proposal to evaluate the inclusion of Bitcoin as a new asset class within its international reserve management strategy.
The decision, reached during a meeting reviewing the 2024 International Reserve Management Report, marks a significant departure from the prevailing cautious stance adopted by many global central banks.
The move follows two years of focused diversification efforts by the CNB and stems from a proposal by Governor Aleš Michl to assess Bitcoin’s potential to enhance both the diversification and return profiles of the central bank’s reserves.
CNB First Step to International Bitcoin Reserve
The CNB has explicitly stated that no immediate changes to its reserve holdings are anticipated, and the approved analysis will directly inform any future investment decisions.
This announcement follows Governor Michl’s recent interview with the Financial Times, where he indicated a potential allocation of up to 5% of the CNB’s €140 billion reserves to Bitcoin.
Such a move, if implemented, would position the Czech Republic as the first Western central bank to formally embrace Bitcoin on its balance sheet, creating a potentially disruptive precedent within the global financial landscape. The CNB has committed to transparency, promising to disclose any subsequent adjustments in its quarterly and annual reserve management reports.
Similarly, Federal Reserve Chairman Jerome Powell stated in a Wednesday press conference that the Federal Reserve is open to innovation in the financial sector and that “banks are capable of serving cryptocurrency customers provided they adequately understand and manage associated risks.”
He elaborated that many of the banks under the Fed’s supervision already offer such services, although the regulatory standards for banks engaging in cryptocurrency activities are currently more stringent.
Bitcoin Price Move Upward
The timing of Governor Michl’s proposal is particularly noteworthy. It coincides with a period of substantial growth in Bitcoin’s value. Bitcoin’s price has demonstrated periods of significant gains, notably reaching record highs exceeding $100,000 following the election of U.S. President Donald Trump.
Furthermore, Bitcoin significantly outperformed major stock indices in 2024. While President Trump’s subsequent executive order on cryptocurrency regulation remains relevant, it lacked specific provisions directly addressing Bitcoin’s status.
