Key Points
- The Czech Republic’s National Bank governor, Aleš Michl, discusses the potential of adding Bitcoin to their reserves as a diversification strategy.
- The country is also considering crypto-friendly tax reforms, including exemption from capital gains tax for digital assets held over three years.
The Czech Republic is contemplating the inclusion of Bitcoin in its reserves, alongside a tax reform favoring crypto investments. This is a part of the growing global momentum for Bitcoin as a reserve asset, which could complement traditional holdings like gold.
Bitcoin’s Growing Recognition
Bitcoin is progressively gaining the attention of nations across the globe, with 2025 expected to see a significant rise in its recognition as a potential addition to foreign exchange reserves. Aleš Michl, the governor of the Czech National Bank, has recently discussed the possibility of acquiring a small amount of Bitcoin as part of a diversification strategy.
These remarks were not intended to signify a major investment but to highlight an increasing openness to explore the role of cryptocurrency in national reserves. However, any decision to include Bitcoin in the Czech National Bank’s reserves would need the approval of its seven-member board to ensure collective decision-making.
Czech Republic’s Crypto Initiatives
In December, the Czech Republic revealed plans to revamp its crypto taxation policies to modernize its approach to cryptocurrency regulation. Prime Minister Petr Fiala proposed exempting digital assets from capital gains tax if held for more than three years, aiming to encourage long-term investments.
The proposal also includes removing reporting requirements for transactions below 100,000 korunas annually (approximately $4,200), offering substantial relief to smaller investors and casual traders.
While the Czech National Bank is prioritizing increasing its gold reserves to 5% of total assets by 2028, Bitcoin is increasingly being seen as a potential reserve asset globally. With a 131% surge in value over the past year compared to gold’s 30%, Bitcoin is viewed as a strong complement to traditional assets.
Global Momentum for Bitcoin
In the U.S., the proposed Bitcoin Act, led by Senator Cynthia Lummis, has spurred efforts in 13 states, including Ohio and Pennsylvania, to establish Bitcoin reserves as a hedge against USD devaluation. This momentum was further accelerated with Donald Trump’s presidency and Republican control of the Senate.
Countries like Japan and Switzerland are also exploring the adoption of Bitcoin as a reserve asset. Switzerland is considering a proposal to include Bitcoin in national reserves alongside gold, requiring 100,000 citizen signatures by mid-2025. Meanwhile, Russia’s new laws enable companies to use Bitcoin for cross-border transactions, offering alternatives amid sanctions.
These developments underscore Bitcoin’s potential to complement gold in reserves and address economic and geopolitical challenges.
