Head of Czech central bank wants it to buy billions of euros in bitcoin 

Aleš Michl: ‘Of course, if you compare my position with other bankers, then I’m the one entering the jungle, or the pioneer’ © Milan Jaros/BloombergThe head of the Czech National Bank wants to plough billions of euros’ worth of the country’s reserves into bitcoin, a groundbreaking move that could make it the first western central bank known to hold crypto assets. Governor Aleš Michl told the Financial Times that he would present a plan to the board to invest in bitcoin as a way of diversifying the CNB’s reserves at a meeting on Thursday. Should the board approve this, then the CNB could eventually hold as much as 5 per cent of its €140bn of reserves in bitcoin, he said.While acknowledging bitcoin’s “extreme volatility” and limited record, Michl highlighted wider investor interest in bitcoin since BlackRock and other firms last year launched bitcoin exchange traded funds.He also pointed to US President Donald Trump’s pledges on deregulation and the growing influence of cryptocurrency executives over his administration. In an executive order last week, Trump set up a working group to evaluate the creation of a national digital asset stockpile.“For the diversification of our assets, bitcoin seems good,” Michl said in an 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.”Federal Reserve chair Jay Powell confirmed in December that the US central bank did not hold any bitcoin as it was not in the list of assets Congress allowed it to purchase. “We are not looking for a law change at the Fed,” Powell said at the time.Central banks have traditionally parked their reserves in conservative assets such as US Treasuries and other forms of highly rated bonds. Some have holdings in equities, but almost none have publicly ventured into crypto.Michl said he had “a totally different philosophy” about bitcoin to his counterparts.“Of course, if you compare my position with other bankers, then I’m the one entering the jungle, or the pioneer,” Michl said. “I used to run an investment fund, so I’m a typical investment banker I would say, I like profitability.”Among central bankers to have warned about the risks of investing in cryptocurrencies is the governor of the Bundesbank, Joachim Nagel, who this month compared bitcoin to “digital tulips”, a reference to a 17th century speculative bubble and then collapse in the price of the bulbs.European Central Bank officials wrote last year that “the fair value of bitcoin is still zero”, adding that “bitcoin is not suitable as means of payment or as an investment”, while former ECB official Benoît Cœuré has previously referred to bitcoin as the “evil spawn of the financial crisis”. El Salvador has been a rare, prominent backer of crypto, making it legal tender in 2021. The government holds 6,048 bit