Comment
Author: Admin | 2025-04-28
UPDATED: January 30, 2025, 1:46PM EST Quick TakeThe Czech central bank has approved a proposal to analyze its options for investing in additional asset classes, including bitcoin.The bank’s board will decide the next steps based on the analysis, with no changes made until that process is concluded. The board of the Czech National Bank approved a proposal on Thursday to analyze the options for investing in additional asset classes, including bitcoin.“The central bank has been increasingly diversifying its investments over the last two years as part of its reserve management strategy,” the CNB said in a statement. “At the proposal of Governor Aleš Michl, the CNB is to assess whether it would be appropriate in terms of diversification and return to include other asset classes in the reserves as well.”The board said it would decide next steps based on the analysis, with no changes made until then. Any new reserve portfolio investments will then be disclosed in its quarterly and annual reports. If a bitcoin allocation is approved, the CNB would become the first central bank known to hold the foremost cryptocurrency."The country is positioned to take a historic step," Lucien Bourdon, Bitcoin Analyst at Czech hardware wallet manufacturer Trezor, told The Block. "If approved, this decision could mark a turning point—not just for the Czech Republic, but for the global adoption of Bitcoin as a tool for national economic strategy."Meanwhile, European Central Bank President Christine Lagarde said on Thursday that bitcoin is not an option for central bank reserves in the Eurozone, which the Czech Republic is not part of, citing concerns over liquidity, security and regulatory scrutiny."Lagarde says bitcoin is unsuitable for reserves because it must be ‘liquid, secure, and safe.’ Yet bitcoin is one of the most liquid assets in the world, trading 24/7 without requiring a counterparty," Bourdon said. "The euro, on the other hand, is a complex system of pegged currencies that has required constant intervention to hold itself together. What, exactly, is unstable here?"Up to 5% potential bitcoin allocationOn Wednesday, Governor Michl told the Financial Times he planned to submit a plan to allocate as much as 5% of its €140 billion ($146 billion) reserves to bitcoin to the central bank’s board on Thursday.The CNB has estimated that holding 5% of its foreign reserves in bitcoin over the past decade would have boosted annual returns by 3.5% but doubled their volatility.Speaking to the FT,
Add Comment