Czech National Bank Skeptical of Bitcoin Due to Legal Uncertainties and Volatility

Jan Kubicek, a board member of the Czech National Bank, has expressed skepticism regarding the inclusion of Bitcoin in the bank's reserves. Kubicek's concerns stem from the legal uncertainties surrounding Bitcoin and its price volatility, which he believes undermines its potential as a stable central bank asset. In an interview, Kubicek acknowledged that the bank is exploring various new asset classes, including Bitcoin, but he remains cautious about its integration into the reserves.

Kubicek highlighted that the legal status of Bitcoin in the Czech Republic poses significant challenges. Owning Bitcoin would necessitate new accounting and auditing processes, adding complexity to the bank's operations. He also noted that while Bitcoin's volatility has been a defining characteristic in the past, its behavior could change if more institutional investors accept it as an investment asset. However, this remains speculative, and the bank must consider the potential risks.

The Czech National Bank is conducting a study on expanding its asset classes, which could be completed by October. Kubicek mentioned other potential investment options, such as international corporate bonds, equity indices like technology stocks, and property investment funds. These alternatives are being considered alongside Bitcoin as part of the bank's strategic planning.

The idea of adding Bitcoin to the bank's reserves was first proposed by CNB Governor Ales Michl in late January 2025. This suggestion garnered interest from the crypto community but met with skepticism from policymakers. The European Central Bank President, for instance, emphasized that reserves must be liquid, secure, and safe, casting doubt on the feasibility of including Bitcoin.

Despite the skepticism, several states have recently added Bitcoin to their national strategic reserves, indicating a growing acceptance of cryptocurrencies in the global financial landscape. However, the Czech National Bank's decision will hinge on a thorough assessment of the risks and benefits associated with Bitcoin, with Kubicek's concerns playing a significant role in the deliberations.