The governor of the Czech National Bank, Aleš Michl, recently discussed the potential inclusion of Bitcoin as part of the nation’s foreign exchange reserves diversification strategy. Highlighting the escalating interest in digital currencies from governments worldwide, Michl admitted to contemplating obtaining a few Bitcoin as part of a larger diversification plan for the bank.
Note that factors such as the bank board’s approval and prevailing investment strategy will determine whether such a shift will take effect. While Bitcoin is under consideration for future investment, there are no immediate plans for it, according to Janis Aliapulios, a board adviser.
The Czech National Bank intends to continue to diversify its reserves through gold purchases, planning to hold approximately 5% of its total assets in gold by 2028. Bitcoin, with its impressive yearly returns, holds potential as a substantial reserve asset alongside gold. Over the past year, Bitcoin’s return was over 131%, significantly higher compared to gold’s 30%.
These discussions suggest a potential paradigm shift in financial strategies of governments and institutions, considering the inclusion of Bitcoin. However, Anndy Lian, a blockchain expert, also warns about Bitcoin’s price volatility which could introduce broader financial fluctuations.
Meanwhile, Bitcoin’s role as a savings technology is being recognized in the United States. The anticipated Bitcoin Act, pushed by Wyoming Senator Cynthia Lummis, suggests establishing a strategic Bitcoin reserve. With support from political parties and states, this bill might be passed in the next four years.
Should U.S. lawmakers approve the Bitcoin Act, Bitcoin might ultimately surpass the $1 million mark, according to Adam Back, a well-recognized cryptographer and CEO of Blockstream. Notably, proposals for strategic Bitcoin reserves have also surfaced in the states of Texas and Pennsylvania.