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CNB proposes investing 5% of reserves in Bitcoin, equating to a €7 billion investment.   Michl sees Bitcoin as a long-term asset despite volatility, aiming for financial innovation.   Bitcoin’s market remains strong with a $2.03 trillion cap, despite recent volume decline. Aleš Michl, Governor of the Czech National Bank (CNB), has suggested incorporating Bitcoin into the country’s reserve strategy. According to the Financial Times, Michl proposes that the CNB allocate 5% of its €140 billion reserves into Bitcoin, a move that would translate to a €7 billion investment. Michl argues that Bitcoin’s long-term value makes it a compelling addition to the bank’s holdings, despite its price swings. He sees it as a modern hedge that could improve the CNB’s financial positioning. Related: Analyst Predicts an Expanded Crypto Reserve Covering Bitcoin and Selected Altcoins Bitcoin’s Growing Role in Global Reserves Michl’s proposal comes as Bitcoin gains mainstream traction as a reserve asset. Countries are increasingly exploring digital assets to diversify holdings amid economic instability. While some policymakers remain skeptical, Michl believes Bitcoin will continue to rise in value, regardless of government intervention.  He also pointed to Bitcoin’s growing political influence in the U.S., citing President Donald Trump’s recent executive order aimed at structuring digital asset regulations. This, according to Michl, signals institutional recognition of Bitcoin on a global scale. Skepticism & Support for Bitcoin in Central Banking Not everyone shares Michl’s optimism. Joachim Nagel, head of Germany’s Bundesbank, has criticized the idea, calling Bitcoin’s volatility a major risk. He compared it to the infamous 17th-century Dutch tulip bubble, highlighting concerns over speculative trading. Related: Meta Shareholders Propose Bitcoin Strategy to Protect $72B Reserves from Inflation Despite the opposition, Michl remains firm. He sees expanding the Czech National Bank’s reserve strategy as a necessary step toward financial modernization. Bitcoin’s Market Performance As of…

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Filed under: News - @ January 29, 2025 7:25 pm