Central Bank Official Questions Bitcoin's Legality and Volatility for Reserves in Czech Republic

The inclusion of Bitcoin (BTC) in the Czech central bank's reserves is still up for debate due to legal concerns and volatility issues raised by a high-ranking official.

The discussion on whether Bitcoin should be included in the Czech central bank's reserves continues, with board member Jan Kubicek expressing doubts due to legal questions and price fluctuations.

Jan Kubicek, a board member of the Czech National Bank, stated in an interview with Reuters on March 18 that while the bank is considering new asset classes, he remains "skeptical" about the original cryptocurrency.

The central banker pointed to Bitcoin's extreme volatility, which he claims makes it an unappealing asset for central banks.

"We will evaluate various classes of assets. Bitcoin is just one" among many other asset classes the bank is examining, the banker said.

Commenting on the current legal status of cryptocurrency in the Czech Republic, he noted that owning Bitcoin would necessitate new accounting and auditing procedures.

"We cannot predict with certainty that Bitcoin's volatility in the coming years will follow the patterns seen over the past decade because I believe that if more institutional investors accept Bitcoin as an investment asset, it will begin to behave differently from what we have witnessed thus far."

Jan Kubicek

According to Kubicek, the CNB's study on expanding asset classes may be completed by October.

He also mentioned the possibility of investing in international corporate bonds, equity indices like technology stocks, and property investment funds as other options for the institution.

CNB Governor Ales Michl first suggested adding Bitcoin to the bank's reserves in late January 2025, sparking interest from the crypto community but skepticism from policymakers.

European Central Bank President Christine Lagarde, for example, criticized the proposed plan, stating that "reserves must be liquid, that reserves must be secure, that they must be safe."

Nonetheless, several countries have recently added Bitcoin to their national strategic reserves, including the US, which under the new Trump administration has taken a more proactive approach towards cryptocurrency.