CNB Explores Bitcoin for Reserves Despite ECB's Lagarde

The Czech National Bank (CNB) has announced plans to explore the potential inclusion of Bitcoin (BTC) in its reserve assets, a move that comes despite European Central Bank (ECB) President Christine Lagarde's vocal opposition to central banks holding the crypto.

During a Jan. 30 meeting, the CNB Bank Board reviewed a 2024 international reserve management strategy document and approved a proposal to analyze additional asset classes for potential investment. According to the announcement, the CNB has been actively diversifying its investments over the last two years as part of a broader reserve management strategy. The Bank Board will evaluate whether expanding into other asset classes aligns with its diversification and return objectives.

While the decision to analyze Bitcoin does not immediately translate into an investment, it signals an increasing openness among certain European monetary authorities toward digital assets. The CNB confirmed that it will implement no changes in its reserves until a thorough review is conducted. The findings will guide the board’s future decisions on reserve allocation. Any updates to reserve portfolios will be disclosed in CNB’s quarterly reports and annual financial statements.

Notably, the announcement confirms reports that CNB was considering allocating up to 5% of its reserves to BTC, which would amount to over $7 billion. Additionally, Michl said during a Jan. 6 interview with CNN Prima News that Bitcoin is a “very interesting thing” and provides a “very interesting” way of diversification against other assets if its code is really what people advocate.

The CNB’s exploratory approach contrasts sharply with the stance of European Central Bank (ECB) President Christine Lagarde, who recently warned against central banks holding Bitcoin. During a speech to the ECB members, Lagarde stated that reserves have to be liquid, secure, and safe, and should not be plagued by the suspicion of money laundering or other criminal activities. She also expressed confidence that Bitcoin would not enter the reserves of any central bank on the ECB’s General Council. However, Aleš Michl is a member of the group.

A global move is underway to implement Bitcoin within national reserves. Last week, President allowing a newly formed crypto working group to assess and potentially establish a crypto stockpile. Meanwhile, Coinbase CEO Brian Armstrong recently said during the World Economic Forum that countries from the G20 will consider a Bitcoin reserve if the US follows through with its push.