As nations worldwide reevaluate cryptocurrency regulations, the Czech Republic emerges as a progressive force with new tax policies and institutional interest in Bitcoin, while its central bank governor weighs digital assets against traditional reserves.
As the United States prepares to adopt clearer crypto regulations under the upcoming Donald Trump administration, more countries in Europe and Asia are contemplating incorporating Bitcoin BTC $106 806 24h volatility: 1.6% Market cap: $2.12 T Vol. 24h: $23.40 B as a hedge against inflation and fiat devaluations. Aleš Michl, the fifth Governor of the Czech National Bank, said that Bitcoin is very interesting as a hedge against inflation, but the board members lack understanding of the underlying source code.
As a result, the Czech National Bank has diversified its investment into gold, currently holding around 50 tons, and other foreign exchange reserves. However, Michl said that he was thinking of buying a few Bitcoins but remains skeptical about investing massively in Bitcoin.
“I considered Bitcoin, but unfortunately there are seven of us from the bank board and I think the gold will be enough now. Bitcoin is a very interesting thing, but no one knows exactly if what we are reading is true because none of us have seen the Bitcoin code,” Michl noted.
Czech Republic and Bitcoin Industry
The Czech Republic has been moving towards cryptocurrency adoption to catch up with the economic status of neighboring countries, led by Germany and Poland. In early December 2024, the Czech parliament unanimously approved a law exempting long-term Bitcoin holders from capital tax gains.
Notably, the new law took effect on January 1, 2025, coinciding with the European Markets in Crypto Assets (MiCA) regulatory. According to the country’s regulators, the adoption of Bitcoin and crypto assets will happen whether the government likes it or not.
Moreover, investors and companies in the Czech Republic have been building high-value companies on the blockchain, with some considering shifting to favoring jurisdictions to ensure future growth prospects.
Bigger Picture
After a massive adoption of Bitcoin by institutional investors through regulated investment products in 2024, such as spot Bitcoin ETFs, nation-states have been moving in the same direction. The overwhelming victory of Donald Trump in the United States 2024 election is a stern reminder that the crypto community is a major electoral force that cannot be ignored by any political movement.
Furthermore, the significant success of El Salvador through its Bitcoin plan over the past years has heavily influenced other nations to rethink the Bitcoin strategy. With more nations struggling with high debt-to-GDP ratios, the adoption of Bitcoin as a hedge against inflation is imminent in the coming years.
The argument is primarily bolstered by the fact that Bitcoin price has outshined Gold’s in the past decade. With the rising Bitcoin liquidity, backed by institutional investors, experts predict the BTC valuation will outshine gold’s in the coming years.
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