Yesterday, the Central Bank of the Czech Republic decided to accept the request of its president and evaluate the viability and the opportunity to activate a Reserve in Bitcoin.
He official press release From the bank establishes that the Board of Directors of the National Czech Bank (CNB) has approved a proposal to analyze the investment possibilities in additional assets classes, on the governor’s proposal Aleš Michl.
Bitcoin reservations: the idea of the Central Bank of the Czech Republic
MichlIn fact, he had previously given An interview with The Financial Times in which he suggested that the Central Czech bank could consider having billions of dollars in its reservations in the form of Bitcoin.
However, the governor had specified since the beginning that it was only an idea in analysis, and added that an immediate decision is not expected in this regard.
Yesterday’s decision by CNB It goes precisely in this direction, since it simply accepts the proposal to evaluate the viability and opportunity of said initiative, without approving or rejecting it.
In the event that this initiative passes, it would be the first west Central Bank ever to celebrate reservations in BTC.
In fact, central banks generally have reservations in conservative assets and remain away from the most risky. In addition, many central banks have long warned citizens about the risks involved in investment or speculating on risk financial assets.
In fact, to tell the truth, As of today, it seems that no important central bank in the world owns BitcoinAlthough there are several public entities, even the important ones, which maintain them.
ECB and other central banks
It is not a coincidence that later Michl’s interview with Financial TimesGovernor of the European Central Bank (ECB), Christine Lagardeexplicitly said that she does not expect any central bank in the eurozone to have Bitcoin in its short -term reserves.
Lagarde In his speech he explicitly mentions his colleagues from CNBalso because the Czech Republic It is part of the EU. However, the country of Central Europe is not part of the Eurozone, so much that its central bank is not among those that have signed to the capital shares of the BCE.
However, one of the members of the General Council of the ECB is the Czech Jiří Rusnok, with whom Lagarde says that he has discussed the issue of Bitcoin reservations.
In fact, the Czech Republic has already embarked on a road to adopt the euro instead of its crown, but it has not yet completed its entrance to the Eurozone. At this time, its adhesion to the Eurozone is practically suspended.
The history of Ales Michl
Michl took care of the leadership of the Central Checo Bank in 2022.
He is a Czech economist, former investment strategist of a commercial bank, as well as co -founder of an algorithmic asset management fund.
When he assumed office, inflation in the country had increased to 17.5%, later reaching a peak of 18% a few months later. Now the Central Czech bank has managed to bring it back to 3%Online, for example, with that of the United States and not much higher than that of the Eurozone.
In addition, under its leadership, the CNB began to buy gold and increase the action in its foreign exchange reserves, to improve the expected performance of bank assets.
It can be defined at the same time that a competent and effective official, but also an innovative, and all this facilitates the understanding of the reasons why he proposed to evaluate the inclusion of Bitcoin in bank reserves.
The possible Bitcoin reserve of the Czech National Bank (CNB)
Michl’s idea would be to authorize the Central Czech bank to maintain 5% of your reservations in BTC.
CNB currently has 140 billion euros In reservations (146 billion dollars), so the maximum ceiling established by Michl for now would end Seven billion dollars.
Keep in mind that it would be a higher figure than the current market value of BTC retained, for example, by the ETF of ARK (ARKB), and not much lower than that of Bitcoin held by Tether.
It should be noted, however, that this is a maximum limit, and not the amount that the bank could want to invest in BTC. In addition, the decision on the possible investment has not yet been taken, and it seems that it will be a long time before the bank is definitively expressed on the matter.
Michl also declared in X that Bitcoin has significant volatility, and that this makes it more difficult to take advantage of his low current correlation with other assets.
The words of the Governor of the CNB are decidedly cautious, but at least they seem open to the possibilities.
In fact, for the Financial Times he had also declared that an investment of the Central Bank in Bitcoin could be useless or could have an “absolutely fantastic value.” He also added that he believes that Bitcoin will continue to grow even without the possible support to the president of the United States, since it represents an alternative investment for many people.
Comment
One of the world’s main cryptographic companies, Trezor, was founded and still has its headquarters in the Czech Republic.
Bitcoin analyst in Trezor, Lucien BourdonHe shared an exclusive comment with The Cryptonomist about Michl’s idea:
“The Czech Republic has been at the forefront of Bitcoin’s innovation, home from the first mining pool, the first hardware wallet and one of the largest Bitcoin conferences in Europe. Now, the country is positioned to take a historic step. The Czech National Bank (CNB) will discuss the allocation of up to 5% of its € 140 billion of reserves in Bitcoin. If approved, this decision could mark a turning point, not only for the Czech Republic, but for the global adoption of Bitcoin as a tool for the national economic strategy.
Bitcoin allows people giving them control over their wealth without depending on third parties. But states can also take advantage of Bitcoin’s properties to strengthen their own sovereignty. If a nation successfully integrates Bitcoin into its reserves (self -opposite and outside foreign regulatory control, gains coverage against monetary degradation and external economic pressure.
On paper, the debate on Bitcoin reserves seems like a financial discussion, but in reality, it is so political and philosophical. Governments and central banks are forced to consider a monetary system that they do not control, and some are not ready for that change. But writing is on the wall. As inflation erodes the purchasing power of Fiat and Bitcoin continues to grow, the question is not whether central banks should have bitcoin, but if they can afford the luxury of not doing so. “
After the president of the ECB, Christine LagardeHe rejected the proposal of the Czech bank, Bourdon continued to say:
“If money laundering and financial crime are the standard to exclude an asset from the reserves of the Central Bank, shouldn’t the euro be analyzed in itself given the history of traditional banks?
Bitcoin transactions are transparent. Traditional bank scandals occur behind closed doors. What system is really more responsible?
Lagarde says that Bitcoin is not suitable for reserves because it must be ‘liquid, safe and safe’. However, Bitcoin is one of the most liquid assets in the world, which quotes 24/7 without requiring a counterpart. The euro, on the other hand, is a complex system of linked currencies that has required constant intervention to stay together. What is exactly unstable here?
The ECB states that Bitcoin is too unstable for reserves, however, central banks have devalued their own coins through an endless stimulus, rescue and manipulation of rates. The real problem is not stability, it is control. Bitcoin represents a monetary system that they cannot print, and that is why they fear it“
