The Czech National Bank (CNB) is considering the inclusion of Bitcoin in its currency reserves but faces some challenges and downsides.
Jan Kucicek's Position
Jan Kucicek, a member of the Czech National Bank, expressed skepticism regarding the potential inclusion of Bitcoin, the leading cryptocurrency, in the country's reserves. He is concerned about Bitcoin's legal status and volatility.
Ales Michl's Proposal
Ales Michl, the governor of the CNB, proposed diversifying the country's reserves with Bitcoin. His proposal suggests that Bitcoin could constitute up to 5% of the bank's total reserves. In late January, the central bank's board voted in favor of assessing the proposal, potentially leading to the Czech Republic purchasing billions worth of Bitcoin. Last month, Michl explained on the X social media platform that his Bitcoin proposal was motivated by his desire to try out the 'highly risky social media asset.'
International Context Views
The total CNB reserves currently stand at $148.7 billion, with securities accounting for the vast majority of them. It is worth noting that Christine Lagarde, the president of the European Central Bank, has an aggressively anti-crypto stance. In late January, she expressed confidence that the banks that are part of the General Council would not touch Bitcoin. After the U.S. officially established a cryptocurrency reserve earlier this month, other major economies are not rushing to follow suit. The Bank of Korea recently rejected the idea of diversifying its reserves with the largest cryptocurrency.
The question of including Bitcoin in the country's reserves remains highly contentious both within and outside of the Czech Republic, requiring further study and analysis.
