Czech Central Bank Governor Proposes Adding Bitcoin to Reserves

Aleš Michl, Governor of the Czech National Bank (CNB), has suggested including Bitcoin as part of the country’s official reserves, according to the Financial Times. Michl stated he would propose investing up to 5% of the Czech Republic’s €140 billion in reserves. If approved, this move would make the Czech National Bank the first Western central bank to hold cryptocurrency, surpassing its current gold reserves of €4.3 billion.

On January 29, 2025, Michl addressed the topic on social media:

Czech National Bank’s goal is price stability. When we took office in July 2022, inflation was 17.5%. We brought it down to target. We are also diversifying reserves—gradually increasing gold holdings from 0% to around 5% and planning for 30% in equities. An asset under consideration is Bitcoin. It currently has zero correlation to bonds and is an interesting asset for a large portfolio. Worth considering. Right now, it’s only at the stage of analysis and discussion. The Bank Board decides, and no decision is imminent. Thoughtful analysis is needed. Bitcoin has significant volatility, which makes it harder to take advantage of its current low correlation with other assets. That’s why I will ask our team on Thursday to further assess Bitcoin’s potential role in our reserves. Nothing more, nothing less.

Balancing Diversification and Volatility

Michl has emphasized the importance of diversifying the central bank’s portfolio while acknowledging the risks associated with Bitcoin. He previously remarked:

It’s possible to have a big range of outcomes, that Bitcoin will have a value of zero or an absolutely fantastic value.

However, he pointed to growing institutional adoption, citing BlackRock’s launch of a spot Bitcoin ETF in 2024 as an important milestone. He also noted a shifting regulatory landscape, particularly in the United States, where former President Donald Trump issued an executive order establishing a cryptocurrency-focused working group.

If the Czech National Bank moves forward with this initiative, it could set a precedent for other European central banks to follow, marking a significant step in Bitcoin’s role in global monetary policy.