The Czech National Bank (CNB) is ready to decide on Thursday if all of its € 140 billion in foreign exchange reserves to bitcoin, an amount for a total of approximately € 7 billion (approximately $ 7.31 billion) (approximately $ 7,31 billion) . Governor Aleš Michl revealed the plan in an exclusive interview With the Financial Times, underlining a bold deviation from traditional asset strategies generally favored by the main central banks.
CNB EYES bitcoin for 5% of € 140 billion reservations
Michl, who previously worked as an investment fund administrator, expressed his conviction that introducing btc in the CNB portfolio could serve as a viable way to diversify holdings. “For the diversification of our assets, bitcoin seems good,” he told FT. He recognized the “extreme volatility” of cryptocurrency and limited history, but pointed out the growing institutional interest, since global asset administrators such as Blackrock launched funds quoted in bitcoin Exchange last year.
If the Board approves the plan, the CNB could direct up to 5% of its reserves, equivalent to approximately € 7 billion, in bitcoin. “Five percent (of our assets) is a lot of money, even for the bitcoin market,” Michl said, underlining the potential impact of a considerable purchase of btc by a sovereign authority.
Most of the world's central banks have moved away from btc, preferring “safer” instruments, such as highly qualified government bonds. Some have ventured into actions, but the public disseminations of bitcoin holdings by these institutions (except for El Salvador) remain practically non -existent.
The president of the Federal Reserve, Jay Powell, confirmed in December that the US Central Bank.
Other senior monetary officials in Europe have been notoriously critical. The governor of Bundesbank, Joachim Nagel, compared bitcoin with “digital tulips”, referring to the seventeenth -century speculative bubble. The officials of the European Central Bank (ECB) have argued similarly that bitcoin's “fair value remains zero.”
However, Michl gave a clearly different tone. “I used to administer an investment fund, so I am a typical investment banker, I would say that I like profitability,” he told FT. He also suggested that more central banks could make their example in the next five years, citing how some pension and commercial banks have begun to have btc in their portfolios.
Michl recognizes the bet: “It is possible to have a large range of results, which bitcoin will have a value of zero or an absolutely fantastic value.” However, he also caught attention to the historical examples of failed corporate investments, such as Enron and Wirecard, arguing that low performance is an inherent risk of portfolio management.
CNB's internal calculations suggest that if the Central Bank had had 5% of its foreign reserves in btc in the last decade, its annual yields would have increased by 3.5%, although with twice the volatility. “But I am saying that my goal is to diversify the portfolio, so if bitcoin is good (for that), then we are going to have it,” Michl said.
In the interview, Michl referred to the pro-critical position of US President Donald Trump and the growing influence of bitcoin-centered executives in Washington. Last week, Trump issued an executive order to explore the creation of a National Reserve of Digital Assets, feeding more discussions about cryptography at the highest levels of government.
Although bitcoin's proposal has captured the holders, the CNB already stands out for its relatively adventurous investment policy; 22% of their foreign exchange reserves are in shares, well above the standard for a central bank.
Michl intends to increase US holdings of 50% of that capital portfolio within three years, above the current 30%. “We are gradually buying and in very small steps because prices (from the United States) are the highest in history,” he explained.
It remains to be seen if the CNB board finally supports Michl's proposal to venture in btc. If approved, the Czech National Bank could become the first important Western Central Bank in maintaining cryptography, establishing a precedent that could inspire others, or serve as a warning story.
The meeting of the CNB Board is scheduled for Thursday, with a final vote on bitcoin's proposal of the governor that is expected shortly after.
At the time of publication, btc quoted at $ 102,817.
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