Czech National Bank (CNB) Governor Aleš Michl Attracts Mixed Responses After Approving a Proposal to Invest a Portion of Its Reserves in Bitcoin (BTC)

With around €7 billion on the line, which is the 5 percent of the CNB's international reserves likely to be invested in Bitcoin, different reactions

The Czech National Bank (CNB) is considering investing a portion of its international reserves in Bitcoin (BTC). The proposal, which was approved by the CNB board, has attracted mixed responses from various sectors.

If the CNB decides to proceed with the investment, it is likely to allocate around €7 billion, which is roughly 5 percent of its total international reserves, to Bitcoin. This move by the CNB would be significant, as it would mark one of the largest investments in the flagship cryptocurrency by a central bank.

However, the proposal has faced opposition from some fellow central bankers, particularly in European nations. For instance, European Central Bank President Christine Lagarde has dismissed the idea of central banks in the bloc adopting Bitcoin as a strategic reserve asset.

Speaking during a recent interview with Bloomberg TV, Lagarde stated that Bitcoin does not meet all the set criteria for an asset to be included in a bank’s reserve. She added that the flagship cryptocurrency is also highly volatile.

“Bitcoin is very risky. It’s a highly speculative asset. It’s very volatile. And the criteria that we have for assets to be included in the reserves are very clear,” Lagarde noted.

Meanwhile, CNB Governor Aleš Michl has admitted that Bitcoin is extremely volatile and its value could one day be zero or a very huge number.

“Of course, if you compare my position with other bankers, then I’m the one entering the jungle, or the pioneer. I used to run an investment fund, so I’m a typical investment banker, I would say, I like profitability,” Michl noted.

On the other hand, the crypto community has been championing the Czech National Bank to adopt Bitcoin as a strategic reserve asset. A recent petition, which was started by a group of Czech citizens, has gathered over 20,000 signatures in support of the move.

The petition, which is addressed to the CNB, argues that Bitcoin is a “unique and exceptional asset” that meets all the criteria to be included in the central bank’s reserves. The petitioners also highlight the fact that Bitcoin has outperformed other traditional assets, such as gold and stocks, over the long term.

“Bitcoin is a unique and exceptional asset that meets all the criteria to be included in the strategic reserves of the Czech National Bank. It is the best performing asset over the last 13 years, outperforming other assets such as gold and stocks,” the petition reads.

The petitioners also urge the CNB to disregard any “unsubstantiated claims” that are being made against Bitcoin by other central bankers and institutional investors. They add that the flagship cryptocurrency is the “only sound money” that can help to protect the Czech economy from inflation.

“We urge you to disregard any unsubstantiated claims made by other central bankers and institutional investors who are threatened by Bitcoin. It is the only sound money that can help our economy,” the petitioners noted.

The CNB is expected to make a final decision on the proposal to invest in Bitcoin in the coming months.