Czech National Bank to explore cryptocurrencies with $1 million testing portfolio

The Czech National Bank (CNB) has purchased $1 million worth of bitcoin and other blockchain-based digital assets in an effort to build hands-on expertise in digital markets.

The portfolio is primarily composed of bitcoin but also includes US dollar–based stablecoins and a tokenised deposit, according to the bank’s official announcement, cited by Decrypt.

"The purpose of the portfolio is to gain practical experience with holding digital assets and to implement and test the necessary related processes," the bank said.

The portfolio will be kept separate from the CNB’s international reserves and will not be actively expanded.

In its press release, the central bank stated that it will test the full chain of processes tied to purchasing, holding, and managing digital assets—from technical key administration and multi-level approval procedures to crisis scenarios, security mechanisms, and checks for anti-money-laundering compliance.

Governor Aleš Michl, who first raised the idea of exploring bitcoin in January, noted that new payment and investment methods are emerging and that the bank wants to be prepared.

In January, the CNB put forward a proposal to establish a multibillion-dollar Bitcoin reserve. The idea was swiftly rejected by the European Central Bank (ECB), which oversees both Eurozone states and non-Euro EU members such as the Czech Republic. 

Although the announcement from the bank stressed that it has no immediate intention of creating a Bitcoin reserve, a report released alongside the press statement indicated that “infrastructure built during the testing phase” of the crypto pilot could later be adapted for “routine operation” and potentially support the inclusion of digital assets in the bank’s official reserves.

The CNB said it will evaluate the project over time, leaving open whether digital assets could eventually form part of its reserves, and in what structure.

The idea of adding bitcoin to reserves received an icy reaction from the ECB, whose President Christine Lagarde stated she does not believe bitcoin will become a reserve asset for EU members.

Although the Czech Republic does not use the euro, it belongs to the European Union and its system of central banks.

Still, the CNB emphasised that acquiring digital assets outside its reserve portfolio complies with both Czech and European legislation.

By Nazrin Sadigova