Czech Central Bank Plans to Allocate 5% of Reserves to Bitcoin
As Bitcoin gains recognition as a hedge against inflation, more nations are considering it for national reserves. The Czech National Bank's governor, Aleš Michl, proposed allocating 5% of the country's reserves to Bitcoin, potentially amounting to €140 billion ($146 billion).
Key Developments
- Brazil is exploring including Bitcoin in its national reserves.
- Several US states have also proposed similar measures, with Utah and Arizona making progress.
- Utah’s House Committee passed a bill allowing 5% allocation of public funds to digital assets over $50 billion market cap.
- Approval of Michl's proposal would make the Czech Republic the first central bank to hold Bitcoin.
Risk Considerations
Michl acknowledges Bitcoin's volatility and potential risks. He stated outcomes could range from complete collapse to significant value appreciation. He believes earlier investment in Bitcoin could have boosted annual returns by 3.5%, but recognized it would increase volatility.