Governor Aleš Michl sees Bitcoin as a hedge against economic uncertainty and an opportunity to diversify the nation’s financial assets.
The move aligns with growing trends worldwide, as US states like Utah and Arizona push similar Bitcoin reserve plans.
If approved, the Czech Republic could set a precedent for other nations considering Bitcoin in their financial reserves.
As Bitcoin continues to gain widespread recognition not just as a store of value but as a hedge against inflation and economic uncertainties, more countries are exploring its potential role in national reserves.
On Wednesday, January 29, Aleš Michl, the governor of the Czech National Bank, announced his plan to propose allocating 5% of the country’s national reserves to Bitcoin. If approved, this would amount to €140 billion ($146 billion) dedicated to the flagship cryptocurrency.
Michl to Reveal His Intention to Central Bank Board Tomorrow
The planned proposal follows a trend of governments and financial institutions considering Bitcoin as a treasury asset.
Brazil recently suggested integrating BTC into its national reserves, while several US states, including Arizona, Utah, Pennsylvania, Florida, Texas, Ohio, New Hampshire, North Dakota, and Oklahoma, have similar measures.
However, only and have made progress. On January 28, Utah’s House Committee passed a bill allowing the state treasurer to allocate 5% of public funds to digital assets with a market capitalization exceeding $50 billion.
With this momentum, the Czech Republic may soon join the ranks of governments actively investing in Bitcoin. In an with the Financial Times, Michl said he plans to submit his proposal on Thursday, January 30, during a board meeting with other members of the Czech National Bank.
While the outcome remains uncertain, approval would make the Czech Republic the first central bank in the world known to hold Bitcoin as part of its reserves.
Balancing Opportunity and Risk
Reflecting on his background as an investment banker, Michl acknowledged that his views differ from traditional central bankers. He :
“Of course, if you compare my position with other bankers, then I’m the one entering the jungle, or the pioneer. I used to run an investment fund, so I’m a typical investment banker I would say, I like profitability.”
“Of course, if you compare my position with other bankers, then I’m the one entering the jungle, or the pioneer. I used to run an investment fund, so I’m a typical investment banker I would say, I like profitability.”
He believes the recent institutional adoption of the crypto asset following the approval of spot Bitcoin exchange-traded funds (ETFs) will be a catalyst for further growth.
He also pointed out that Trump’s administration could have a potential influence on Bitcoin’s trajectory.
“For the diversification of our assets, bitcoin seems good. 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 said.
While Michl remains bullish on Bitcoin, he recognizes its volatility and the inherent risks. The central bank governor acknowledged that Bitcoin could either collapse entirely or become an exceptionally valuable asset.
“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, so, yes, I’m ready [for a possible bitcoin collapse],” he said.
He further noted that had the Czech National Bank allocated 5% of its reserves to Bitcoin acquisitions earlier, it would have boosted annual returns by 3.5%. However, he also admitted that such a move would have increased the bank’s volatility.
