PRAGUE (Reuters) – Czech National Bank board member Jan Kubicek is “sceptical” about the inclusion of bitcoin among the bank’s hefty reserves, wary of legal uncertainties and concerns around volatility of the digital currency.
CNB Governor Ales Michl put bitcoin up for consideration earlier this year, and the bank has begun an analysis looking into broadening the asset classes it holds in its reserves portfolio.
“We will assess different classes of assets. Bitcoin is just one of them,” Kubicek said in an interview on Tuesday. “My position is rather sceptical about bitcoin.”
He said bitcoin’s legal status was one concern, and that direct ownership would mean developing many new processes in accounting or auditing, for example.
Volatility was another worry and assessing market price developments was difficult, he said.
“We cannot be certain that bitcoin’s volatility in the coming years will mirror the patterns observed over the past decade because I suspect that, if more institutional investors accept bitcoin as an investment asset, it will start to behave differently from what we have seen so far.”
The bank’s study on new asset classes could come by October, Kubicek said.
Holdings of international corporate bonds could be explored, he said, as well as the possibility of investing in more targeted equity indices, such as for technology, and property investment funds.
CNB Vice Governor Eva Zamrazilova has said bitcoin is not a suitable asset for reserves, while European Central Bank boss Christine Lagarde has also said Europe’s central banks are not the place for it.
The Czech central bank’s reserves – at 142.8 billion euros ($155.75 billion) – are around 45% of gross domestic product, and it has diversified holdings in recent years, gradually purchasing gold, and shifting a larger portion of the portfolio into equities.
($1 = 0.9168 euros)
(Reporting by Jason Hovet; Editing by Rachna Uppal)
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