Key Points
- The Czech National Bank’s governor, Aleš Michl, plans to propose allocating 5% of the country’s national reserves to Bitcoin.
- If approved, this would lead to an investment of €140 billion ($146 billion) in Bitcoin.
The governor of the Czech National Bank, Aleš Michl, has announced his intention to suggest dedicating 5% of the country’s national reserves to Bitcoin. This move comes as the cryptocurrency continues to gain recognition as a hedge against inflation and economic uncertainties.
Michl’s proposal, if accepted, would result in an allocation of €140 billion ($146 billion) to Bitcoin, the leading cryptocurrency. This move would mark a significant shift in the country’s financial strategy, aligning it with a growing trend of governments and financial institutions considering Bitcoin as a treasury asset.
Proposal Follows Global Trend
Michl’s proposed move comes on the heels of similar suggestions from other countries. Recently, Brazil proposed integrating Bitcoin into its national reserves. Several US states, including Arizona, Utah, Pennsylvania, Florida, Texas, Ohio, New Hampshire, North Dakota, and Oklahoma, have also proposed similar measures.
Only Utah and Arizona have made progress so far. Utah’s House Committee recently passed a bill allowing the state treasurer to allocate 5% of public funds to digital assets with a market capitalization exceeding $50 billion. If Michl’s proposal is accepted, the Czech Republic could soon join the ranks of governments actively investing in Bitcoin.
Michl’s Views on Bitcoin
In an interview with the Financial Times, Michl shared his plans to submit his proposal during a board meeting with other members of the Czech National Bank. If his proposal is accepted, it would make the Czech Republic the first central bank in the world known to hold Bitcoin as part of its reserves.
Despite his bullish stance on Bitcoin, Michl recognizes its volatility and inherent risks. The central bank governor acknowledged that Bitcoin could either collapse entirely or become an exceptionally valuable asset. He also noted that if the Czech National Bank had allocated 5% of its reserves to Bitcoin earlier, it would have boosted annual returns by 3.5%. However, such a move would also have increased the bank’s volatility.
