Czech National Bank Governor wants to invest in bitcoin

Last week, Aleš Michl, the governor of the Czech National Bank, announced that he plans to propose an investigation into investing in Bitcoin as a way to diversify the bank’s currency reserves. If the proposal is approved, the central bank will invest approximately 5% of its total reserves of 140 billion euros in Bitcoin, which amounts to around 7 billion euros. On Thursday, the proposal was confirmed as accepted, meaning that an analysis of the investment possibilities will now take place.

First Western Central Bank

The decision to invest in bitcoin would make the Czech Republic the first Western central bank to publicly invest in the currency. Michl describes the decision as bitcoin being a good option for diversifying assets. He also noted that interest in Bitcoin has increased after the world’s largest asset manager, BlackRock, launched its ETF, which is a Bitcoin-based exchange-traded fund.

Reactions have been mixed. The President of the European Central Bank, Christine Lagarde, dismissed the proposal, stating that Bitcoin does not meet the criteria that reserves should have. Lucien Bourdon from the Bitcoin wallet provider Trezor responded to the skepticism, describing the situation as: “Lagarde says Bitcoin is unsuitable for reserves because it must be ‘liquid, safe, and secure.’ Meanwhile, Bitcoin is one of the most liquid assets in the world, trading 24/7 without requiring intervention. The euro, on the other hand, is a complex system that requires constant intervention to hold itself together. What is really unstable here?”