Czech Republic Could Become First in Europe To Hold Bitcoin Reserves

Key Takeaways

• Czech National Bank chief Aleš Michl proposes allocating 5% of reserves to Bitcoin.
• The Czech Republic joins a growing list of nations considering a strategic Bitcoin reserve.
• Bitcoin’s volatility is becoming less of a deterrent as institutional adoption rises.

The Czech National Bank has taken a historic step, becoming the first central bank in Europe to formally consider Bitcoin (BTC) as part of its national reserves.

Governor Aleš Michl introduced the proposal on Jan. 30, calling for allocating 5% of the country’s public funds to Bitcoin.

The bank has now accepted the proposal for review, signaling a potential shift in how nations approach digital assets as part of their financial strategy.

Czech National Bank Moves Forward With Bitcoin Reserve Proposal

The Czech National Bank’s board has approved a proposal to explore Bitcoin as part of its national reserves, marking a potential shift in the country’s approach to digital assets.

Following a board meeting on Jan. 30, the central bank agreed to analyze the feasibility of investing in alternative asset classes, including Bitcoin. The discussion was part of a broader review of international reserve management, focusing on diversification and potential returns.

The CNB will now conduct a formal assessment to determine whether expanding its treasury portfolio to include Bitcoin and other non-traditional assets aligns with its long-term financial strategy. A final decision will follow after the review.

Czech Republic Eyes Bitcoin as a Strategic Asset

In an interview with the Financial Times, Michl acknowledged Bitcoin’s volatility but pointed to increasing institutional and government adoption as a compelling reason to invest.

He argued that Bitcoin has evolved into a legitimate diversifying asset and cited financial powerhouses like BlackRock and various governments as indicators of its growing credibility.

The Czech central bank chief said his risk appetite sets him apart from other central bankers, citing his background as an investment banker. He added that Bitcoin presents a strong opportunity for “diversifying our assets.”

His comments come from multiple countries—including the U.S., Brazil , Poland, Japan, and Russia—that are considering adding Bitcoin to their reserves.

Shifting Views on Bitcoin Volatility

For years, central banks have favored stable assets like gold, U.S. Treasury bonds, and fiat currencies, avoiding Bitcoin due to its price swings.

However, recent market disruptions have challenged the perception that traditional assets are inherently more stable.

Michl’s proposal reflects a broader trend of governments and financial institutions warming up to Bitcoin as a store of value.

While critics have long argued that Bitcoin’s volatility makes it unsuitable for national reserves, Michl suggested that the growing adoption by institutions and governments will help stabilize its price over time.

“Those [Trump] guys can now kind of create some bubble for Bitcoin, but I think the trend would be an increase without those guys as well because it’s an alternative [investment] for more people,” he said.

Publicly traded companies like MicroStrategy, SpaceX, and Tesla began holding Bitcoin in 2020, and despite market downturns in 2022-23, their investments have largely paid off.

Investor confidence in Bitcoin as a treasury asset has continued to grow, bolstered by increasing regulatory clarity and mainstream financial integration.