According to the Czech Republic's central bank governor, Alex Michl, incorporating bitcoin into the bank's reserves could enhance performance due to its low correlation with traditional assets, but its high volatility poses a significant risk. Michl noted that all assets carry the risk of losing value, emphasizing the importance of diversified portfolios. The Czech National Bank's $1 million test portfolio, which includes bitcoin, a USD stablecoin, and a tokenized deposit, was established to gain experience with blockchain-based assets. A study by the bank found that bitcoin can provide returns unlinked to other assets, similar to venture capital but more liquid.
However, the bank's Bank Board decided against investing its foreign exchange reserves in bitcoin due to its high risk, despite its potential for higher returns with smaller allocations.