Ales Michl, the governor of the Czech National Bank (CNB), has opined that Bitcoin should not be lumped together with other cryptocurrencies.
He has noted that the cryptocurrency market remains in its "infancy," predicting that it will experience a lot of "failures and successes."
Michl has cautioned potential buyers that they could lose all of their money, urging them to exercise "extreme caution."
That said, the Czech economist is convinced that Bitcoin and its underlying technology should be studied by central bankers. "Studying bitcoin won’t harm us—on the contrary, it will strengthen us," he noted.
As reported by U.Today, Michl submitted a proposal to assess the viability of diversifying central bank assets with the help of Bitcoin. It could potentially result in the CNB buying billions of euros worth of the largest cryptocurrency. The maximum share of the central bank's assets that could be put into Bitcoin would be capped at 5%.
The proposal, which has been hailed as a watershed moment for Bitcoin, was then greenlit by the CNB board.
However, it does not mean that the central bank will inevitably buy Bitcoin. "Based on the results of the analysis, the Bank Board will then decide how to proceed further. No changes will be implemented in this area until then," Michl added.
In the meantime, Christine Lagarde, the president of the European Central Bank (ECB), recently rejected the idea of central banks investing their reserves in Bitcoin, predicting that this will not happen. She stated that the reserves have to be both liquid and secure.
Dan Burgin
Vladislav Sopov