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The Czech National Bank governor says Bitcoin should be studied, not feared, as the institution considers a Bitcoin test portfolio for potential reserves
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Studying Bitcoin’s underlying technology and economic impact could strengthen central banks despite past hesitancy from financial institutions concerned about its volatility, according to Aleš Michl, governor of the Czech National Bank (CNB).
Bitcoin (BTC) should be broadly studied by central banks, not feared, Michl stated in a Feb. 19 X post. He said Bitcoin’s unique technology should not be “lumped together with other crypto assets,” adding:
“We central bankers should study it and explore the technology it is built on. Studying Bitcoin won’t harm us—on the contrary, it will strengthen us.”
Michl’s comments come nearly three weeks after the governor shared a proposal for creating a Bitcoin “test portfolio” with the CNB’s bank board meeting on Jan. 30.
“This step is motivated by a desire to learn about and try out this highly risky alternative asset,” added the governor.
Source: Aleš Michl
However, Michl emphasized that this is only the “initial stage of the analysis” and that a final decision will depend on the outcome of the analysis.
Michl started looking at Bitcoin as a potential reserve asset on Jan. 7, when he was considering acquiring “a few Bitcoin” for diversification, Cointelegraph reported.
Bitcoin’s 130% yearly returns for 2024 make it difficult to ignore for financial institutions and large investment funds.
Related: Bitcoin’s price movement ‘looks very manufactured’ — Samson Mow
Czech National Bank to consider $7 billion Bitcoin reserve plan
The CNB may become the first European central bank to invest in Bitcoin if the proposal is approved.
If approved, the investment may amount to over $7.3 billion in Bitcoin purchases, given the CNB’s total reserves of more than $146 billion, according to André Dragosch, head of research at Bitwise.
Dragosch noted the significance of the proposal in a Jan. 29 post on X, writing:
“Just to put this into perspective: These BTC purchases alone would be equivalent to around 5.3 months of newly mined Bitcoin supply.”
International reserves, CNB. Source: André Dragosch
While Bitcoin is an interesting asset “worth considering” for a large portfolio, the board of the bank will need to provide “thoughtful analysis,” before making its final decision, wrote Michl in a Jan. 29 X post.
Related: FTX’s $1.2B repayments mark key moment in crypto industry recovery
Still, Bitcoin remains pressured by ongoing trade tensions between the US and China, according to Vugar Usi Zade, chief operating officer at Bitget.
“While this headwind remains in the market, with President Trump eyeing more tariff hikes in the coming weeks, Bitcoin has traded with resilience,” Zade told Cointelegraph.
Magazine: BTC above $150K is ‘speculative fever,’ SAB 121 canceled, and more: Hodlers Digest, Jan. 19 – 25
This article first appeared at Cointelegraph.com News
