“Chen highlighted that if the Czech National Bank moves forward with its plan to allocate 5% of its €140 billion foreign reserves into Bitcoin, the country could become the world’s third-largest Bitcoin holder, surpassing nations like the United Kingdom, Germany, and Ukraine.
She also pointed out the capital gains tax exemption for Bitcoin, which has been in place for over three years, encouraging long-term adoption of the cryptocurrency.”
“Unlike many European nations, the Czech Republic is not tied to European Central Bank policies, giving it more flexibility and potentially influencing other countries to follow its lead in adopting Bitcoin.”
Czech Republic’s Bitcoin reserve
The Governor of the Czech National Bank (CNB), Aleš Michl, has proposed investing up to 5% of the bank’s reserves in Bitcoin as a strategy to diversify its assets. He believes this move could improve the profitability of the bank’s reserves.
However, the proposal has faced criticism due to Bitcoin’s high volatility and the risks it carries. Critics argue that central banks should focus on liquidity, stability, and capital preservation rather than speculative investments.
In addition to the proposed reserve allocation, the Czech Republic has passed a law exempting Bitcoin from capital gains tax if held for more than three years. This legislation, signed by President Petr Pavel, is designed to promote long-term investment in cryptocurrencies and brings the country’s crypto regulations in line with the European Union’s Markets in Crypto-Assets framework.”
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