The European Central Bank (ECB) has made its stance on Bitcoin crystal clear.
ECB President has stated that Bitcoin will not be included in any EU central bank reserves, emphasizing concerns over liquidity, security, and its association with financial crimes.
The statement reinforces the ECB's cautious approach towards cryptocurrencies, which are often seen as volatile and decentralized assets outside traditional financial regulations.
While some institutions explore digital currencies, the ECB maintains that reserves should be stable and free from risks linked to money laundering and criminal activities.
This position highlights the ongoing divide between central banks and the crypto industry. As regulatory scrutiny grows, Bitcoin remains a contested asset in mainstream finance, despite its increasing adoption by private entities and investors.
However, The Czech National Bank (CNB) is taking a forward-looking approach to Bitcoin.
The bank has approved a proposal to assess whether Bitcoin could be included among other asset classes in its reserve strategy. This move, led by Governor Ales Michl, signals a shift toward exploring diversification in national reserves.
While no immediate changes are planned, the CNB's decision to analyze Bitcoin’s potential role in its reserves marks a significant step in bridging traditional finance with digital assets.
The study's results could influence future reserve strategies, potentially paving the way for Bitcoin's partial adoption in national financial holdings.
Governor Aleš Michl said on Wednesday that if approved, the Czech National Bank could eventually hold as much as 5% of its 140 billion euro ($146 billion) reserves in Bitcoin.
Since taking over the Czech National Bank in 2022, Michl has focused on diversifying the institution’s substantial reserves by slowly building up gold holdings and investing a more significant part of the portfolio in equities that can produce steady profits in the long run.
The Czech National Bank Governor said that BTC has no relation to bonds, but it is still quite interesting to include it in the portfolio at the moment. He also stressed that the discussion is still in the early stages.
As for Bitcoin’s volatility, Michl said that this is the main reason it is difficult to use the digital asset as a reserve asset despite the diversification benefit. He noted he would tell the central bank’s team to carry out a more detailed analysis of the potential of BTC in the reserves, stressing that this is just the first step.
If Bitcoin is implemented in its reserves, this could be the first shift into cryptocurrency by a Western central bank.
As central banks worldwide debate the role of cryptocurrencies, the CNB’s evaluation highlights the growing recognition of digital assets in institutional portfolios. The final decision will depend on the assessment of Bitcoin’s stability, liquidity, and long-term viability.