Aleš Michl, President of the Central Bank of the Czech Republic (čnb), announced his plans to create a Bitcoin reserve worth billions of euros by taking Bitcoin (BTC). This move followed Donald Trump’s goal of creating a strategic BTC reserve of the government during the presidency. Michl offered a detailed plan to invest in Bitcoin and diversify reserves to the Central Bank.

Bitcoin reserve plan came up

According to Michl’s plan, the Central Bank of the Czech Republic aims to keep at least 5 %of the reserves of 140 billion euros in Bitcoin. This points to a flow of 7 billion euros from a European bank. Michl also touched upon Donald Trump’s De-Regulatory steps and the final decision on creating a stock of crypto assets. Trump’s plan to create Bitcoin reserve seems to have encouraged other market players to follow a similar path. The President of the Czech Central Bank told the Financial Times in his statement:

Bitcoin seems to be a good option to diversify our assets. These [Trump] developments can currently create a balloon for Bitcoin, but I think this trend will increase without their influence, because Bitcoin becomes an alternative investment tool for more people.

Hehaangi did not come from the USA

Michl draws attention to Bitcoin’s “excessive volatility ve and relatively short past, while emphasizing the increasing interest of investors. He also mentioned that giants and other companies such as Blackrock offer arranged Bitcoin ETFs and that they achieved great success in 2024. A different approach from the US Federal Bank in December, US Federal Bank President Jerome Powell announced that central banks did not have plans to create Bitcoin reserves, because the Congress has not yet approved it. Powell stated that “FED did not demand a change in law on this issue”.

So far, central banks have chosen to invest in safe assets, especially US treasury bonds and bonds. In addition, no Central Bank has yet to purchase BTC. Michl said that the perspective of Bitcoin is quite different from other Presidents of the Central Bank. He said:

Of course, if you compare my position with other bankers, I am the person who enters the forest or a pioneer. I was running an investment fund, so I like a typical investor banker, profitability.

If foreign reserves were kept in BTC…

According to the Central Bank of the Czech Republic, if 5 %of foreign reserves were kept in Bitcoin in the last decade, the annual return would increase by 3.5 %, but volatility would double. Michl said that a central bank’s big investment in Bitcoin ETF may affect the price of BTC. “5 %of our assets, even a big money for the Bitcoin market,” he said.