A Czech Central Bank Governor Calls for Central Bankers to Study Bitcoin
Aleš Michl, the governor of the Czech National Bank (CNB), believes that Bitcoin should be thoroughly studied by central banks rather than feared. According to Michl, the underlying technology of Bitcoin should not be lumped in with other cryptocurrencies and deserves special attention. In a post on X published on February 19, he stated:
“We, central bankers, must study it and explore the technology on which it is based. Studying Bitcoin will not harm us; on the contrary, it will strengthen us.”
Bitcoin: An Asset to Study Rather Than Fear
Moving away from the traditional reluctance of financial institutions, Michl’s statement marks a change in approach. Institutions often cite the volatility of cryptocurrencies as a barrier to adoption.
A Test Portfolio in Bitcoin for the CNB?
Moving beyond mere words, Michl proposed the creation of a test portfolio in Bitcoin during a CNB board meeting on January 30. The aim is to experiment with this alternative asset and analyze the risks and opportunities it presents. However, Michl emphasizes that this is only the “initial phase of analysis” and any final decision will depend on the conclusions of this study.
The exploration of Bitcoin as a potential reserve asset began on January 7 when Michl mentioned the idea of acquiring “a few Bitcoins” to diversify CNB’s reserves.
Bitcoin: An Opportunity That Cannot Be Ignored
The increase in Bitcoin’s price in 2024 makes this reflection even more relevant. With an annual performance exceeding 130%, Bitcoin is attracting the attention of institutional investors and fund managers.
If approved, the CNB could become the first European central bank to officially invest in Bitcoin. The proposed investment would total over $7.3 billion, a fraction of the institution’s total reserves of $146 billion, according to Bitwise’s research head, André Dragosch.
Between Prudence and Revolutionary Potential
Despite the growing interest, Michl stresses that Bitcoin remains a speculative asset that requires thorough analysis before being integrated into CNB’s reserves. The bank’s board of directors will need to provide “in-depth reflection” before making a final decision.
If the Czech National Bank takes the leap, it could pave the way for wider adoption of Bitcoin by traditional financial institutions, marking a new era in the history of digital assets.
