Czech National Bank Eyes Bitcoin for Reserves in Bold Move

Czech National Bank (CNB) Governor Aleš Michl is reportedly set to propose Bitcoin as part of the country’s reserve assets, signaling a potential shift in the nation’s financial strategy. According to a Jan. 29 Financial Times report, the CNB could allocate up to 5% of its $146.13 billion reserves to BTC if the plan secures approval.

This initiative would mark a departure from the bank’s reliance on gold and the US dollar, embracing Bitcoin as a hedge against global economic shifts. Earlier this month, Michl hinted at expanding the CNB’s asset mix, aligning with a growing institutional push into digital assets.

A $7.3 Billion Bitcoin Bet?

André Dragosch, European Head of Research at Bitwise, estimated that a full 5% allocation would translate to around $7.3 billion in Bitcoin—equivalent to approximately 71,568 BTC. That figure would surpass CNB’s current $4.3 billion gold reserves and equate to roughly 5.3 months’ worth of newly mined Bitcoin.

Dragosch noted:

“Czech central bank holds around 146 billion USD in official reserve assets of which 138 billion USD are FX reserves and 4.3 billion USD are gold. They plan to invest up to 5% of these reserves into BTC (approximately 7.3 billion USD / ~71,568 BTC).”

The Motivation Behind the Shift

Michl views Bitcoin as a strategic diversification tool, citing rising institutional demand and the emergence of crypto investment products like BlackRock’s Bitcoin ETFs. Additionally, he pointed to shifting US policies, particularly under former President Donald Trump, whose deregulation efforts and industry-friendly stance have strengthened crypto’s appeal.

“For the diversification of our assets, Bitcoin seems good… Those [Trump] guys can now kind of create some bubble for Bitcoin, but I think the trend would be an increase without those guys as well, because it’s an alternative [investment] for more people,” Michl stated.

Despite Bitcoin’s volatility, Michl appears confident in its long-term prospects. He acknowledged the risks but emphasized the CNB’s experience in handling unpredictable assets, referencing past setbacks with investments like Enron and Wirecard.

“It’s possible to have a big range of outcomes, that Bitcoin will have a value of zero or an absolutely fantastic value… but in our history, we have also had some stocks like Enron or the payment company Wirecard, so we have some experience with bad investments, so, yes, I’m ready [for a possible Bitcoin collapse],” he said.

If implemented, this move would position Czechia among a select group of nations integrating Bitcoin into their sovereign reserves, reinforcing the growing role of digital assets in global finance.