Czech central banker Kubicek ‘sceptical’ of bitcoin as reserve asset

PRAGUE (Reuters) – Czech Nationwide Financial institution board member Jan Kubicek is “sceptical” in regards to the inclusion of bitcoin among the many financial institution’s hefty reserves, cautious of authorized uncertainties and issues round volatility of the digital forex.

CNB Governor Ales Michl put bitcoin up for consideration earlier this 12 months, and the financial institution has begun an evaluation wanting into broadening the asset courses it holds in its reserves portfolio.

“We are going to assess completely different courses of property. Bitcoin is only one of them,” Kubicek mentioned in an interview on Tuesday. “My place is quite sceptical about bitcoin.”

He mentioned bitcoin’s authorized standing was one concern, and that direct possession would imply creating many new processes in accounting or auditing, for instance.

Volatility was one other fear and assessing market worth developments was troublesome, he mentioned.

“We can’t be sure that bitcoin’s volatility within the coming years will mirror the patterns noticed over the previous decade as a result of I think that, if extra institutional traders settle for bitcoin as an funding asset, it is going to begin to behave in a different way from what now we have seen to this point.”

The financial institution’s research on new asset courses may come by October, Kubicek mentioned.

Holdings of worldwide company bonds could possibly be explored, he mentioned, in addition to the opportunity of investing in additional focused fairness indices, similar to for know-how, and property funding funds.

CNB Vice Governor Eva Zamrazilova has mentioned bitcoin will not be an acceptable asset for reserves, whereas European Central Financial institution boss Christine Lagarde has additionally mentioned Europe’s central banks are usually not the place for it.

The Czech central financial institution’s reserves – at 142.8 billion euros ($155.75 billion) – are round 45% of gross home product, and it has diversified holdings in recent times, regularly buying gold, and shifting a bigger portion of the portfolio into equities.

($1 = 0.9168 euros)

(Reporting by Jason Hovet; Enhancing by Rachna Uppal)