In a historic move, the Czech National Bank (CNB) has approved a proposal to assess the feasibility of investing in Bitcoin as part of its foreign reserves. If implemented, the CNB could become the first central bank to hold Bitcoin, signaling a potential shift in global reserve strategies.
Governor Aleš Michl spearheaded the initiative, citing Bitcoin’s potential diversification benefits and return potential. The bank, which manages €140 billion ($146 billion) in reserves, is evaluating whether an allocation of up to 5% in Bitcoin could enhance portfolio performance.
According to internal estimates, such an investment over the past decade would have boosted annual returns by 3.5%, though it would have also doubled portfolio volatility.
Growing Institutional Interest in Bitcoin
Michl emphasized the increasing institutional adoption of Bitcoin, particularly following BlackRock’s Bitcoin ETF launch and President Trump’s pro-crypto stance. Despite acknowledging Bitcoin’s volatility, he sees it as an asset that could gain broader acceptance among central banks in the coming years.
The CNB board will conduct an in-depth analysis before making a final decision. Any changes in reserve management strategy will be disclosed in the bank’s quarterly and annual reports.
While the decision remains uncertain, the Czech Republic’s interest in Bitcoin could pave the way for other central banks to consider digital assets in sovereign portfolios.
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