Czech National Bank Considers Bitcoin as Potential Diversification Strategy for Foreign Exchange Reserves

The governor of the Czech National Bank is considering Bitcoin as a potential diversification strategy for the country’s foreign exchange reserves. In an interview with CNN Prima News, Aleš Michl said he was thinking about acquiring “a few Bitcoin” for diversification, which wouldn’t count as a significant investment for the bank.

However, an adviser to the seven-member board of the Czech National Bank told Cointelegraph that the bank is not currently planning a Bitcoin acquisition.

“To sum up, CNB is now not considering buying crypto assets for its reserves,” said Janis Aliapulios, adding that Governor Michl did not rule out further future debate on the matter.

The bank will continue its diversification plan via gold purchases in the near future, with plans to increase gold holdings to about 5% of its total assets by 2028, Aliapulios said.

Bitcoin could emerge as a significant reserve asset next to gold, thanks to its robust yearly returns. During the past year, Bitcoin rose by over 131% while gold prices rose by about 30%, TradingView data shows.

BTC and gold, 1-year chart. Source: Cointelegraph/TradingView

Bitcoin’s 130% yearly returns occurred while corporate executives were selling stocks at unprecedented levels at a ratio of six sellers to buyers, Cointelegraph reported on Dec. 13.

“This growing shift among governments and institutions could see Bitcoin integrated into their financial strategies,” said Anndy Lian, an author and intergovernmental blockchain expert, commenting on Michl’s remarks.

However, Bitcoin’s price volatility may also be a “double-edged sword” for national reserves, which could lead to wider financial swings, Lian added.

Bitcoin’s status as a savings technology is also gaining traction in the United States. Known as one of the most anticipated crypto-related bills, the Bitcoin Act — championed by Wyoming Senator Cynthia Lummis — proposes the creation of a strategic Bitcoin reserve.

The Bitcoin reserve proposal is gaining significant support thanks to US President-elect Donald Trump's victory in the November 2024 election and the incoming Republican Party Senate majority, according to Anastasija Plotnikova, co-founder and CEO of Fideum.

With bipartisan support, the bill could be accepted during the next four years. “State-level momentum is building, with initiatives such as Pennsylvania's Bitcoin Strategic Reserve Act serving as a model for broader adoption,” Plotnikova said.

The idea of a strategic Bitcoin reserve received support from both sides of the political aisle, including from Democratic Party Representative Ro Khanna, the first Democratic lawmaker to back a Bitcoin reserve. The states of Texas and Pennsylvania have also made similar proposals.

Bitcoin may eventually surpass the $1 million price tag if the Bitcoin Act is accepted by US lawmakers, according to Adam Back, co-founder and CEO of Blockstream, the inventor of Hashcash and one of the most notable cryptographers in the industry.