Czech Central Bank Purchases $1 Million in Bitcoin and Digital Assets for Testing Program

The Czech National Bank (CNB) has announced the purchase of approximately $1 million in Bitcoin and other digital assets as part of a pilot program designed to gain practical experience with digital markets. 

The central bank plans to review the project’s results within two to three years.

According to the CNB, the test portfolio is primarily composed of Bitcoin, alongside U.S. dollar-based stablecoins and a tokenized deposit. 

The assets were purchased through a regulated exchange, though the bank did not disclose which platform or specific instruments were used.

“The purpose of the portfolio is to gain practical experience with holding digital assets and to implement and test the necessary related processes,” the CNB stated. 

The holdings will be managed separately from the country’s international reserves and will not be expanded beyond the current size.

As part of the initiative, the central bank will test operational procedures for managing digital assets, including key storage, multi-level approval processes, crisis response protocols, and anti-money-laundering compliance. 

“In the test portfolio, the central bank will test the whole chain of processes associated with the purchase, holding and management of digital assets – from technical administration of keys and multi-level approval processes, through crisis scenarios and security mechanisms, to verifying anti-money-laundering compliance,” CNB said.

Governor Aleš Michl, who initially proposed the idea earlier this year, said the pilot aims to prepare the institution for emerging trends in payments and investments. 

“It is realistic to expect that, in the future, it will be easy to use the crown to buy tokenised Czech bonds and more besides – with one tap an espresso; with another an investment such as a bond or another asset that used to be the preserve of larger investors,” Michl said. 

“As a central bank, we want to test this path.”

The CNB noted that the portfolio’s value and composition may fluctuate as the bank carries out test transactions with various digital assets. 

The project will be evaluated before any decision is made on whether such assets could play a role in official reserves.

The European Central Bank (ECB) has previously voiced skepticism about Bitcoin as a reserve asset, with President Christine Lagarde stating she does not expect EU member central banks to adopt it for that purpose. 

While the Czech Republic is not part of the eurozone, it is a member of the European Union and its system of central banks. 

The CNB emphasized that its purchases comply with Czech and EU legislation, since the assets are held outside its official reserves.

The CNB added that, under existing regulations, it could invest in Bitcoin through an exchange-traded fund but is not currently considering that option due to Bitcoin’s limited history and volatility.