Czech Central Bank Announces $1 Million Bitcoin Buy

The Czech Central Bank has disclosed that it purchased $1 million in Bitcoin (BTC) and other cryptocurrencies. However, it clarified that there are no plans to add BTC to reserves for the foreseeable future. 

The bank acquired the assets to test and assess the processes associated with purchasing, holding, and managing blockchain-based assets, and plans to share its experience over the next three years. 

Czech Central Bank Makes Bitcoin (BTC) Purchase 

The purchase makes the Czech Central Bank the first central bank to purchase Bitcoin (BTC) and add it to its balance sheet. The test portfolio includes BTC, a USD stablecoin, and a tokenized deposit, purchased through a regulated exchange. However, the bank has not shared any details about the market used or the exact assets. The bank stated in its announcement, 

The transaction was approved by the bank’s board on October 30. The assets will be held separately from the bank’s international reserves and will not be actively increased. The bank’s governor, Aleš Michl, first proposed the idea of investing in Bitcoin in January. However, it was met with strong opposition and criticism by ECB President Christine Lagarde. However, while the Czech Republic is part of the European Union, it has not adopted the euro, giving the country’s central bank a degree of autonomy in pursuing its own policies. Michl stated, 

New Avenues Of Payments And Investments 

Michl added that the bank wants to be ready to handle new ways of making payments and investments, stating, 

Michl added that the bank will be doing transactions with its portfolio as part of the experiment. He also noted that the portfolio’s value could fluctuate over time. 

Future Adoption 

The Czech Central Bank will assess the project in the future, leaving the question about whether digital assets could become a part of its reserves open to interpretation. The bank’s idea of looking at Bitcoin as part of its reserves was met with strong opposition by the European Central Bank and its President, Christine Lagarde. Lagarde has stated on numerous occasions that Bitcoin will not become a reserve asset of European Union members. However, the Czech Central Bank purchased the assets outside its reserves, thus complying with Czech and European legislation. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice