CNB Proposes 5% Bitcoin Reserve, Pioneering Western Central Bank

Coin WorldWednesday, Jan 29, 2025 4:27 pm ET
1min read

The Czech National Bank (CNB) is considering a significant move in the cryptocurrency sphere by proposing to allocate 5% of its reserves in Bitcoin (BTC). This decision, if approved, would make the CNB the first Western central bank to hold cryptocurrency as part of its reserves.

In an interview with The Financial Times, CNB Governor Aleš Michl revealed his intention to propose this strategy at the bank's seven-member board meeting on Thursday. Michl believes that investing in Bitcoin would increase the diversification of the Czech Republic's investment portfolio and potentially generate larger returns.

Michl's proposal comes amidst a growing trend of Bitcoin adoption, including the rise of spot market exchange-traded funds (ETFs) and pro-crypto actions by US President Donald Trump. The governor acknowledges that his viewpoint may differ from other bankers but expresses confidence that his approach will lead to a better-performing investment portfolio.

Meanwhile, Senator Cynthia Lummis of the United States has urged her government to act on its own Bitcoin reserve proposal before other countries, such as the Czech Republic, take the lead. Lummis' proposal has inspired other nations to consider creating their own Bitcoin reserves, but the US has yet to implement the plan.

Inspired by Trump's crypto policies, countries like the Czech Republic are moving to adopt Bitcoin. Arizona and Utah have recently passed Bitcoin bills, pushing forward progressive financial policies. The Czech Republic plans to introduce a Bitcoin acquisition bill, which, if passed, would make it the first nation to hold a BTC reserve.

The CNB's proposal to allocate over $7.3 billion, or 5% of its balance, into Bitcoin marks a significant step in the cryptocurrency's mainstream acceptance. As the global financial landscape continues to evolve, central banks and governments are increasingly exploring the potential benefits of integrating digital assets into their reserves.

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