Core Focus: The exploration of digital assets as a potential reserve asset class, the criteria for inclusion, and the cautious approach of major central banks.

In-Depth Notes:
The emergence of digital assets and cryptocurrencies has opened a new frontier for reserve allocation. While the vast majority of central banks have rejected digital assets as a reserve asset class, a small number are exploring their potential.

The CNB’s Bitcoin Analysis:
The Czech National Bank has conducted a detailed analysis of the hypothetical inclusion of bitcoin in its foreign exchange reserves. The research, extending earlier analysis with new data, addresses two developments: the CNB’s ongoing gold accumulation toward a 100-ton target, and a hypothetical inclusion of bitcoin. The analysis covers two time horizons (2010–2025 and 2020–2025) in both reserve currencies and Czech koruna.

On gold, the CNB found that accumulating toward the 100-ton target represents a modest adjustment that leaves the portfolio’s risk-return profile broadly unchanged. On bitcoin, historical data suggest it is a powerful driver of returns achievable with a small allocation; however, bitcoin’s short history and unstable financial characteristics limit the reliability of these findings. Given these uncertainties, the CNB’s Bank Board decided not to invest its FX reserves in bitcoin at this time, while commissioning a small pilot portfolio of digital assets to build institutional expertise.

Kazakhstan’s Crypto Reserve Initiative:
Kazakhstan has taken a more forward-leaning approach. The National Bank of Kazakhstan has begun forming a portfolio of crypto-related investments and plans to allocate up to $350 million from its gold and foreign exchange reserves into a national crypto reserve. The central bank governor described the move as part of a broader effort to adapt the country’s reserves strategy to the growing role of digital assets in global finance.

The strategy does not involve large direct purchases of cryptocurrencies such as bitcoin; instead, the focus will be on companies operating within the digital asset ecosystem. The portfolio will include shares of high-technology companies linked to the cryptocurrency and digital financial assets sector, as well as indexes, funds and other financial instruments whose market dynamics are closely tied to crypto assets. The selection process is ongoing, with first investments expected to begin in April or May 2026.

Central Bank Digital Currencies (CBDCs):
CBDCs have been described as a potential future reserve asset class. In emerging economies, CBDCs are viewed as tools to boost financial inclusion, modernise payments, and reduce dependence on unstable local currencies. The CNB has indicated that it is considering a small pilot portfolio of digital assets to build institutional expertise, rather than making a direct allocation to cryptocurrencies.