Bitcoin: An Asset To Study, Not To Fear, According To The Head Of The Czech Bank

Aleš Michl, the governor of the Czech National Bank (CNB), recently expressed his interest in Bitcoin (BTC), stating that central banks should study it rather than fear it. In a recent post, he emphasized that BTC possesses a unique technology that should not be conflated with other digital assets.

Bitcoin must be studied and not feared! According to the governor of the Czech National Bank

“We, central bankers, should study it and explore the technology on which it is built. Studying Bitcoin will not harm us – on the contrary, it will strengthen us,” said Aleš Michl, governor of the Czech National Bank (CNB).

These statements come three weeks after he presented, during a CNB board meeting on January 30, a proposal aimed at creating a “test wallet” in bitcoin. This initiative aims to analyze this highly volatile asset and experiment with its use in the central bank’s reserves.

However, Michl clarified that this initiative is only in its initial analysis phase. Any final decision will depend on the results of the evaluation conducted by the CNB.

A potential investment of $7.3 billion

If the proposal is approved, the CNB could become the first European central bank to integrate Bitcoin into its official reserves. The plan envisions an investment of up to 5% of the bank’s total reserves, or about $7.3 billion.

According to André Dragosch, head of research at Bitwise, such a purchase would have a significant impact on the BTC market. He indicated that these acquisitions would represent about 5.3 months of the newly mined bitcoin supply.

A cautious approach to bitcoin volatility

Although this initiative has garnered interest, it also raises concerns, particularly regarding bitcoin’s volatility. Many financial institutions remain skeptical about integrating cryptocurrencies into official reserves, fearing their unpredictability and uncertain regulation.

Despite Christine Lagarde’s opposition to the inclusion of BTC in central banks, if the CNB were to approve this proposal, it would mark a turning point in the institutional recognition of bitcoin in Europe. It could even inspire other central banks to explore this path.