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Journalist
Hassan Shittu
Journalist
Hassan Shittu
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The Czech National Bank (CNB) has become the center of an evolving debate over Bitcoin’s place in national reserves.
What started as CNB Governor Aleš Michl’s bold proposal to allocate up to 5% of the country’s €140 billion reserves to Bitcoin has now met resistance from within the bank’s leadership.
Board member Jan Kubicek has expressed deep skepticism, citing Bitcoin’s extreme volatility and legal complexities.
It all started with Michl’s January 2025 announcement that Bitcoin could serve as a valuable diversification tool for the Czech Republic’s reserves.
However, opposition within the CNB, led by Kubicek, argues that Bitcoin remains too volatile and legally uncertain to be a prudent investment for the central bank.
The CNB is now conducting a study on expanding asset classes, which could conclude by October 2025, but Bitcoin’s place remains highly uncertain.
Czech Move into Bitcoin Reserves
Governor Aleš Michl’s proposal to include Bitcoin in the CNB’s reserves was met with intrigue and controversy when first announced.
Michl, known for his investment banking background, argued that Bitcoin’s inclusion could enhance portfolio diversification.
He noted that had the CNB allocated 5% of its reserves to Bitcoin over the past decade, annual returns would have increased by 3.5 percentage points, albeit with doubled volatility.
Michl’s perspective aligns with a broader trend of growing institutional interest in Bitcoin.
With entities like BlackRock and other major asset managers integrating Bitcoin into ETFs and political shifts in the U.S. signaling more crypto-friendly policies.
He likened Bitcoin’s trajectory to other alternative investments, stating that while Bitcoin could ultimately prove worthless, the same risks apply to traditional investments like stocks.
Despite his optimism, Michl remains cautious about implementation, stating that any allocation would be gradual.
According to the Financial Times report, he reiterated that even a 5% Bitcoin investment by the CNB could significantly influence Bitcoin’s market price due to the sheer size of the reserves in question.
Internal Skepticism: Legal and Volatility Concerns
While Michl’s proposal has drawn attention, it has also faced resistance within the CNB.
Jan Kubicek, a board member, has been vocal in his concerns about Bitcoin’s extreme price swings and legal uncertainties.
In an interview with Reuters on March 18, Kubicek stated that while the CNB is evaluating various asset classes, Bitcoin remains a highly speculative option.
Kubicek emphasized that Bitcoin’s volatility undermines its reliability as a reserve asset.
He questioned whether Bitcoin’s historical price movements would continue in the same pattern as institutional adoption increases.
“We cannot be certain that Bitcoin’s volatility in the coming years will mirror the patterns observed over the past decade,” Kubicek said.
Kubicek also noted that integrating Bitcoin into the CNB’s reserves would require new accounting and auditing procedures.
Unlike traditional reserve assets such as government bonds and equities, Bitcoin lacks standardized regulations within central banking frameworks.
This skepticism extends beyond the CNB. European regulators have largely maintained a cautious stance on Bitcoin, with the European Central Bank dismissing it as unsuitable for payments or investments.
The Future of Bitcoin in National Reserves
Despite opposition within the CNB, Michl’s proposal is not without precedent. Countries like El Salvador have already incorporated Bitcoin into their financial systems, albeit under different circumstances.
Moreover, the U.S. has taken a more proactive stance on cryptocurrency under the new Trump administration.
Trump’s executive order establishing a national digital asset stockpile suggests that some policymakers view Bitcoin as a strategic financial asset.
For now, the Czech Republic’s position remains uncertain. While Michl’s proposal introduced the possibility of Bitcoin in central bank reserves, the strong opposition from within the CNB suggests that such a move faces significant hurdles.
The bank’s ongoing study on asset class diversification, set to conclude in October 2025, will likely determine whether Bitcoin remains a viable option for the CNB’s reserve strategy.
