- Czech National Bank proposes $7B Bitcoin investment (5% of reserves), marking a historic shift in central bank crypto strategies.
- Diversification and U.S. political trends drive CNB’s plan, contrasting global peers skeptical of Bitcoin’s volatility and suitability.
The Czech National Bank (CNB) may become the first major central bank to allocate public reserves to Bitcoin. Governor Aleš Michl confirmed plans to propose a $7 billion Bitcoin investment—roughly 5% of the bank’s $146 billion reserves—during a board meeting this week, according to a Financial Times report. If approved, the move would mark a historic shift in how national institutions approach cryptocurrency.
Michl cited diversification as a primary motive, noting the CNB already holds 22% of its portfolio in equities, unlike peers favoring stable assets like bonds. He acknowledged Bitcoin’s volatility but pointed to U.S. political shifts, including President Donald Trump’s pro-crypto policies, as factors influencing his proposal. Additionally, Michl referenced rising institutional interest, such as BlackRock’s Bitcoin ETFs, which spurred retail and corporate adoption since their 2023 debut.
The plan clashes with skepticism from global central banks
Federal Reserve Chair Jerome Powell recently stated the U.S. holds no Bitcoin and has no plans to acquire it. The European Central Bank has repeatedly dismissed Bitcoin’s value, calling it “unsuitable” for payments or investments.
Even El Salvador, which adopted Bitcoin as legal tender in 2021, reduced its crypto exposure this year under IMF pressure.
Despite institutional hesitance, Bitcoin’s price surged 125% in 2024, outpacing the Nasdaq’s 30% gain. The cryptocurrency briefly crossed $100,000 after Trump’s November election win, fueled by speculation over his administration’s crypto-friendly stance.
While Trump’s recent executive order outlined a digital asset regulatory framework, it omitted direct references to Bitcoin.
Critics argue Bitcoin’s unpredictability undermines its role as a reserve asset, while proponents view it as a hedge against inflation and geopolitical risks.
The board’s decision, expected soon, could pressure other central banks to reevaluate their strategies ahead of tighter EU crypto regulations set for 2025.
Michl’s proposal underscores a broader trend
Once-marginalized cryptocurrencies are gaining traction in mainstream finance, even as debates over their stability persist. The outcome may hinge on whether Bitcoin’s recent performance outweighs its history of sharp price swings—a gamble no major central bank has yet embraced.