Earlier this month Czech National Bank Governor, Aleš Michl, said he was considering Bitcoin as part of the country’s national reserves. Now the Financial Times reported that he will propose that the central bank hold as much as 5% of the countries €140 billion in reserves in the cryptocurrency during a board meeting tomorrow.
“For the diversification of our assets, bitcoin seems good,” Michl said in an FT interview. “Those [Trump] guys can now kind of create some bubble for bitcoin, but I think the trend would be an increase without those guys as well, because it’s an alternative [investment] for more people.”
The topic of Bitcoin as part of national reserves is a contentious issue. In last week’s Trump executive the crypto community was disappointed about the topic. The White House stopped short of pledging to invest fresh cash into Bitcoin, instead opting to consider creating a “national digital asset stockpile” from asset seizures.
Czechia is part of the EU but does not use the Euro. One of the European Central Bank directors, Ulrich Bindseil, wrote a paper about how an ongoing rise in the price of Bitcoin redistributes wealth from the average person to early Bitcoin holders. Controversially for a free market economy, the authors considered a potential ban. That’s without considering a Bitcoin reserve.
South African not keen
During the World Economic Forum, the Governor of the South African Reserve Bank, Lesetja Kganyago, also objected to the idea of investing reserves into Bitcoin. South Africa is viewed as a crypto friendly regime because the government believes it should not dictate which investments consumers can or cannot choose, provided the assets are compliant, fair, transparent and fully understood.
On the topic of Bitcoin reserves he argued if you’re going to hold Bitcoin then why not platinum or beef or mutton.
“I would caution against the move that would say, there is an industry with a particular interest in a particular product, and we would like to impose it on society and say (that) society must hold this as a reserve,” he said. “I would have a fundamental problem with that.”
