Czech National Bank (CNB) Confirms It's Assessing Bitcoin as a Potential Reserve Asset

While speculation has grown over Czechia potentially following El Salvador's Bitcoin reserve strategy, Michl emphasized that Bitcoin remains under review rather than part of the CNB's official reserve diversification plan.

The Czech National Bank (CNB) is reportedly considering Bitcoin as a potential reserve asset, but Governor Aleš Michl has clarified that no immediate plans are in place for an official Bitcoin allocation.

While speculation has grown over Czechia potentially following El Salvador’s Bitcoin reserve strategy, Michl emphasized that Bitcoin remains under review rather than part of the CNB’s official reserve diversification plan.

Bitcoin Under Review in CNB’s Reserve Strategy

According to Financial Times journalist Raphael Minder, since taking office in July 2022, Michl has focused on stabilizing the economy after the country’s worst inflation crisis in three decades.

With inflation peaking at 17.5% in 2022 and later stabilizing near target levels, the CNB has been gradually restructuring its reserve strategy. This includes:

* Expanding gold holdings by 25% to about $6.5 billion.

* Increasing equity holdings from 1% to 5% of total reserves.

* Aiming to double reserves over the next five to seven years.

CNB officials have also stated that they are considering a broader range of assets, such as private equity and real estate, to enhance diversification.

In an interview with X, Michl noted that Bitcoin’s near-zero correlation with bonds makes it an interesting asset for a balanced portfolio, but he also pointed to its volatility as a major challenge for central bank holdings.

Michl: No Decision Yet, Bitcoin Still Under Analysis

Addressing speculation, Michl took to X to clarify the bank’s position. He confirmed that Bitcoin’s potential role in the CNB’s reserves is under discussion but stressed that no decision is imminent.

He further acknowledged Bitcoin’s inherent risks, stating that he had previously remarked that Bitcoin could one day be worth either zero or a huge amount.

Bitcoin’s Volatility Concerns Could Delay Any Move

Despite its potential benefits, Bitcoin’s price volatility remains a primary concern for policymakers. Its frequent price swings make it difficult to fully capitalize on its low correlation with other assets.

Michl confirmed he will ask his team to conduct a deeper evaluation of Bitcoin’s suitability as a reserve asset. However, he reiterated that this does not mean any immediate action will be taken.

Czech National Bank’s Long-Term Strategy

The Czech National Bank’s overarching goal remains price stability and sustainable economic growth. The decision to hold Bitcoin in reserves—if ever made—will require extensive research, risk assessment, and approval from the Bank Board.

For now, the CNB is focused on expanding its gold and equity holdings, ensuring diversification while maintaining financial stability.

Bitcoin’s Role in Global Reserves

The CNB’s evaluation of Bitcoin comes at a time when several global financial institutions are reconsidering digital assets.

While Czechia is not making an immediate move, the ongoing evaluation signals that Bitcoin’s role in global finance is evolving—even among traditionally cautious institutions.