Czech National Bank Considers Investing in Bitcoin

CNB Governor Aleš Michl, in an interview with Financial Times, stated that he plans to present a proposal to the bank’s board to include Bitcoin in its investment portfolio. He emphasized that this would serve as a strategy to diversify the country's reserves.

If approved, the bank could allocate up to 5% of its assets, equivalent to €140 billion, toward cryptocurrency investments.

Despite Bitcoin’s high volatility and relatively short market history, Aleš Michl emphasized the growing interest in BTC among major financial institutions. He specifically pointed to the launch of Bitcoin exchange-traded funds (ETFs) by firms like BlackRock and other traditional financial players.

Michl also cited U.S. President Donald Trump’s economic policies as a major factor driving the increasing adoption of cryptocurrencies. He noted that Trump’s push for deregulation and support for digital assets is accelerating the expansion of the crypto industry. Last week, Trump even announced the formation of a task force to assess the potential creation of a national digital asset fund.

“For the diversification of our assets, bitcoin seems good,” Michl said in an interview. “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 also predicts that other central banks may follow the Czech Republic’s lead in the coming years and start investing in cryptocurrency. Even today, some commercial banks, investment funds, and pension funds are incorporating digital assets into their portfolios.

However, the Czech National Bank governor acknowledges the risks associated with Bitcoin investments. While he sees the potential for significant price growth, he also recognizes the possibility of total devaluation. 

“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,” he added.

Currently, the Czech National Bank holds foreign exchange reserves of €140 billion, equivalent to 45% of the country’s GDP. A key feature of its investment strategy is that nearly a quarter of its portfolio comprises major tech company shares. Over the next three years, Michl plans to increase the share of U.S. stocks in the portfolio from 30% to 50%.