NAIROBI (CoinChapter.com)— The Czech National Bank (CNB) is reviewing a potential $7.3 billion Bitcoin allocation, sparking debate over crypto’s role in national reserves. Meanwhile, the European Central Bank (ECB) has increased its gold holdings to 35% of total foreign reserves, reinforcing its conservative stance on digital assets.
Czech Bank Explores Bitcoin in National Reserves
CNB Governor Aleš Michl is leading discussions on diversifying the bank’s $146 billion reserves with Bitcoin. He proposed allocating up to 5%, a move that could make CNB the first central bank to integrate Bitcoin into national reserves.
Czech National Bank explores new asset investments. Source: XThe bank has expanded its investment portfolio over the past two years, exploring alternatives to enhance returns. Michl noted that historical models suggest a 3.5% annual return increase with Bitcoin but warned about the asset’s volatility. He acknowledged Bitcoin’s rising institutional demand, citing BlackRock’s push for a U.S. spot Bitcoin ETF.
Lucien Bourdon, a Bitcoin analyst at Trezor, called the CNB’s move a “historic turning point.” He argued that integrating Bitcoin into reserves could help nations hedge against monetary debasement and economic pressure.
Czech central bank to vote on BTC reserves. Source: David BaileyIndustry figures have weighed in on the debate. David Bailey, CEO of BTC Inc., highlighted the CNB’s Bitcoin proposal, emphasizing the urgency for other nations, including the United States, to consider similar strategies.
ECB Strengthens Gold Reserves, Rejects Bitcoin
The ECB remains skeptical of Bitcoin as a reserve asset. President Christine Lagarde dismissed its potential, citing security, liquidity, and regulatory concerns. The central bank increased gold’s share in its reserves from 15% to 35%, reinforcing its reliance on traditional safe-haven assets.
ECB’s Christine Lagarde addresses policy decisions. Source: YouTube
Lagarde emphasized that ECB reserves must be “secure, liquid, and free from criminal risks.” Despite Bitcoin’s outperformance over gold in long-term returns, the ECB remains firm in its rejection of crypto as a viable reserve asset.
The CNB’s review follows a growing trend among central banks considering Bitcoin. In contrast, the U.S. Federal Reserve and several states, including Texas and Florida, have proposed Bitcoin reserves as part of a broader financial strategy.
Meanwhile, El Salvador has demonstrated how Bitcoin can be integrated into a national reserve. Since adopting Bitcoin as legal tender in 2021, the country has attracted foreign investments and expanded its financial inclusion efforts.
BTC/USD 1-day price chart. Source: CoinMarketCapBTC is currently trading at $104,209, consolidating between $106,000 and $91,700 in recent months.
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