Czech National Bank Governor Weighs Bitcoin for Future Reserve Strategy

Czech National Bank Governor Ales Michal recently considered bitcoin a potential diversification strategy for the country's foreign exchange reserves, citing growing government interest in cryptocurrency as a savings technology.

In an interview with CNN's Prima News, Mitchell said he was considering getting “a few bitcoins” that wouldn't be considered a big investment for the bank.

The seven-member board of the Czech National Bank must approve any decision to acquire bitcoin.

Janis Aliapulios, the advisor of the board, when asked about a purchase, confirmed that the bank currently has no plans for Bitcoin (BTC) investment. However, Michal remains open to considering Bitcoin diversification in the future.

“In conclusion, CNB does not intend to buy crypto assets for the current stock. However, the potential buyer has not left any further debate on this topic,” Aliapoulios told Cointelegraph.

The bank will continue its diversification plan with gold purchases in the near future and plans to increase its gold holdings to approximately 5% of its total assets by 2028, Aliapoulios added.

Thanks to strong annual returns, Bitcoin could emerge as an important reserve asset next to gold. In the past year, Bitcoin has risen more than 131 percent, while gold prices have risen more than 30 percent, according to TradingView data.

The 130% year-over-year gains occurred while corporate executives were selling shares at a ratio of six sellers to buyers, Cointelegraph reported on December 13.

Mickle's comments point to a growing trend among governments and institutions evaluating their financial strategies to include bitcoin, according to author and governmental blockchain expert Andy Lean.

“As more countries think along these lines, we will see a gradual redefinition of what constitutes a ‘safe' reserve asset. If Bitcoin becomes a staple in national reserves, it could fundamentally change the landscape of global finance, pushing decentralized and digital approaches to economic stability.

However, bitcoin's price volatility can be a “double-edged sword” for national reserves, potentially leading to widespread financial turmoil, Lian added.

RELATED: Bitcoin Needs to Increase Trading Volume to Grow Above $105K in January

US Bitcoin legislation could strengthen Bitcoin's status as a savings technology.

Bitcoin's level of 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 Lammis – proposes the creation of a strategic Bitcoin reserve.

Fedium co-founder and CEO Anastasija Plotnikova said that the Bitcoin reserve proposal is gaining significant support with the victory of US President-elect Trump in November 2024 and the upcoming Republican Senate majority vote.

With bipartisan support, the bill could be passed within the next four years. State-level progress is building, with initiatives like Pennsylvania's Bitcoin Strategic Reserve Act serving as models for broader adoption, Plotnikova said.

Related: 3 Major Developments That Will Drive Crypto Adoption in 2024

The Strategic Bitcoin Reserve idea has received support from both political stripes, including from Democratic Rep. Ro Canna, the first Democratic lawmaker to own a Bitcoin reserve.

The states of Texas and Pennsylvania have proposed the same.

According to Adam Back, founder and CEO of Blockstream, creator of Hashcash and one of the most prominent cryptographers in the industry, if the Bitcoin Act is approved by US lawmakers, Bitcoin could eventually surpass the $1 million mark.

Eric Trump explains how his father moved BTC to $1M. Source: Cointelegraph/YouTube

Magazine: BTC hits $100K, Trump taps Paul Atkins for SEC seat, and more: Hodler's Digest, December 1–7