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Investing.com-- Czech National Bank Governor Aleš Michl wants to spend billion of euros of the country’s public reserves in buying Bitcoin, a potentially groundbreaking move for the country and the cryptocurrency, the Financial Times reported on Wednesday.
Michl told the FT that he plans to present a plan to the central bank board to invest in Bitcoin to diversify its reserves, and will do so at a meeting on Thursday. If the board were to approve the plan, the CNB could eventually hold up to 5% of its 140 billion euro ($146.1 billion) reserve in Bitcoin- worth about $7.03 billion.
The investment will also make the CNB the first major central bank to adopt the cryptocurrency- representing a major step in crypto adoption.
Michl acknowledged that Bitcoin had “extreme volatility” and a limited record. But he also flagged U.S. President Donald Trump’s positive stance towards cryptocurrency, as well as the growing influence of crypto executives in Trump’s administration, the FT reported.
Michl also highlighted increased investor interest in crypto after the launch of Blackrock’s spot Bitcoin ETFs last year. The CNB stands out among other central banks, given that 22% of its portfolio is already in equities- which differs from the relatively stable assets usually held by central banks, such as Treasuries and cash.
Trump had last week signed an executive order calling for a crypto regulatory framework and a national reserve of digital assets. But he did not mention Bitcoin explicitly in the order.
Michl’s stance contrasts with beliefs held by most other major central bank chiefs, who have largely rejected Bitcoin’s viability as a store of value. Federal Reserve Chair Jerome Powell had recently clarified that the bank held no Bitcoin and had no plans to hold any tokens.
The European Central Bank had also stated that the fair value of Bitcoin was “still zero,” calling the crypto unsuitable for use in payments or investment.
El Salvador, which had adopted the currency as legal tender in 2021, recently scaled back its Bitcoin adoption plans as part of a debt relief deal with the International Monetary Fund.
Still, Bitcoin surged to record highs over the coveted $100,000 level after Trump’s election victory in November. The crypto was the best performing investment in 2024, surging nearly 125%, compared to a 30.1% jump in the Nasdaq.