Czech Central Bank Asks About Bitcoin’s Position in Reserves
There is controversy regarding Bitcoin’s position in the Czech National Bank (CNB) reserves with board member Jan Kubicek questioning it based on legal uncertainty and price volatility.
Fears of Volatility and Legal Structure
In a March 18 Reuters interview, Kubicek said that while the CNB is investigating new asset classes, he is “sceptical” that Bitcoin would make a good reserve asset. He pointed to the high volatility of Bitcoin, saying that it makes it less attractive for central banks to hold.
“We will be assessing different classes of assets. Bitcoin is only one of them,” Kubicek said, again emphasizing that the bank is looking at different investment opportunities.
He also discovered legal and procedural concerns. “Having Bitcoin would entail new audit and accounting procedures,” he stated, asking what it should be treated as under the Czech Republic regulatory view.
Institutional Adoption and Changing Market Patterns
Kubicek also said that Bitcoin’s behavior would be different if institutional investors more and more take it up. “We cannot guarantee that Bitcoin’s volatility over the next couple of years will behave according to historical patterns. If more institutional investors begin to view Bitcoin as an investment asset, it will start to behave differently,” he added.
The CNB study on expanding asset classes, potentially including cryptocurrency, is set to complete by October 2025.
Alternative Investments Considered
Kubicek revealed that the CNB also considers other types of investment products, such as foreign corporate bonds, equity indices-including tech shares-and real estate investment funds.
CNB Governor Ales Michl previously suggested the addition of Bitcoin to the bank’s reserves in January 2025. Although this garnered the attention of the cryptocurrency community, policymakers remain cautious.
European and Global Perspectives on Bitcoin Reserves
European Central Bank President Christine Lagarde opposed it, arguing that “reserves have to be liquid, secure, and safe.” Nevertheless, certain countries have already integrated Bitcoin into national reserves. The United States during the Trump administration has approached cryptocurrency more forcefully, and discussions about whether or not Bitcoin has a place in world finance are ongoing.
