Czech central bank’s Bitcoin reserve plan may take months, exposure cut to under 1%: report

The Czech central bank is reviewing a Bitcoin reserve plan that may take months, with potential exposure set to be well below the originally suggested, sources say.

The Czech central bank’s Bitcoin (BTC) adoption plan may take months to finalize, with exposure expected to be much lower than the initially suggested 5%.

Governor Ales Michl first floated the idea in an interview with the Financial Times. The proposal sparked excitement in the crypto space but faced skepticism from policymakers. European Central Bank President Christine Lagarde dismissed it, saying that “reserves have to be liquid, that reserves have to be secure, that they have to be safe.”

Following Michl’s proposal, the Czech National Bank’s board commissioned a study, which will assess Bitcoin’s feasibility as a reserve asset. The governor is open to its conclusions, even if they dismiss the idea. However, Bloomberg’s sources now say the study may take months to complete. Moreover, even if the study supports Bitcoin purchases, the sources say the CNB’s exposure would be under 1% of total reserves, far from the initially reported “up to 5%.”

Michl admitted Bitcoin’s value could go to zero but also sees its potential as CNB’s data suggests that if 5% of its reserves had been in Bitcoin over the past decade, annual returns would have risen by 3.5% points — but volatility would have doubled. If the plan moves forward, CNB could become the first Western central bank known to hold Bitcoin, joining El Salvador, which holds 6,048 BTC worth about $619 million, per data from Bitcoin Treasuries.