The relationship between central banks and Bitcoin has long been characterized by scepticism and hesitation. Although many monetary authorities have considered issuing central bank digital currencies, little serious consideration has been given to holding bitcoin as a reserve asset. However, the Czech National Bank has launched a pilot project to test the direct hosting of bitcoin, which has radically changed the situation — or it will reshape our perception of sovereign wealth management in the digital age。

To understand the significance of this progress, CoinRank interviewed Térezor analyst Lucien, who has been following developments in the Bitcoin market and self-custody. Lucien, based in Prague, had an in-depth knowledge of the Czech Bitcoin ecosystem, and he had unique insights into the importance of the Czech National Bank (CNB) initiative and its implications for future monetary policy and financial sovereignty。

Operate Sandbox Method

“This is not the same as many news titles suggest,” Lucien clarified at the beginning of the conversation. “The Czech National Bank did not immediately include bitcoin in the official reserves. They created a so-called operating sandbox — a test investment portfolio worth $1 million, which contains bitcoin, a dollar-stabilized currency and a bank deposit in token form.”

He explained that the controlled environment had a specific purpose: to build internal capacity before making greater commitments. “The sandbox environment enables central banks to gain practical experience in areas ranging from trusteeship and key management to anti-money laundering compliance, accounting, and chain clearing and auditing.” Lucien elaborates. “This is a learning-by-doing approach that is distinct from the theoretical discussions that have dominated the central banking community for many years.”

When asked about the timing of this initiative, Lucien pointed to an interesting contradiction. “Just ten months before the National Bank of Italy launched the pilot project, the President of the European Central Bank, Cristina Lagarde, had categorically stated that no ECB General Council central bank would be involved in bitcoin. Now, however, we see a Member State doing so.” He paused and added, “This disconnect reveals important differences in innovation and risk management between different monetary authorities — some still ideologically opposed, others willing to try”

Lucien noted that this initiative is highly consistent with the overall strategy of the Governor of the National Bank of Brazil, Alesh Miher. “Miher has been openly discussing the potential of Bitcoin in long-term investment and has led the Bank to diversify its reserves, including large-scale gold purchases. This test portfolio, which he himself introduced in January 2025, reflects a well-thought-out concept rather than a passive reaction to market pressure or public sentiment.”

Bitcoin as an anonymous asset

In our discussions, Bitcoin is frequently referred to as “digital gold”. When asked about the comparison, Lucien responded: “I think this statement is fundamentally accurate, but there are also important nuances. The key is to understand bitcoin as an anonymous asset, similar to gold, whose sovereign value derives from direct ownership rather than claims against other institutions.”

He compared this to traditional foreign exchange reserves: “The operating principles of foreign exchange reserves are completely different. Ultimately, they represent a claim to another system of government, which inevitably entails political risks. There is no such risk for bitcoin and gold, as institutions can take direct custody of them.”

When asked if bitcoin was really better than gold, Lucien became more excited. “By doing so, it may be better than gold. Gold requires vaults, insurance, armed transportation and laboratory certification — all of which entail enormous costs and complex logistics. Bitcoin requires proper key management, but once the agency has this capacity, the security and transfer efficiency of assets will be greatly enhanced. The settlement takes hours, not weeks, and the cost structure is very different.”

He also stressed another key advantage: “The inherent transparency provided by Bitcoin is beyond the reach of gold. For example, El Salvador shares its Bitcoin holdings in real time on the chain, and anyone can independently verify them. For gold reserves, the public can only trust the data published by the Central Bank. For Bitcoin, however, this transparency is internal to the agreement itself.”

Key management challenges

Turning to the operational challenges facing central banks, Lucien said without hesitation: “If there are any obstacles in operation that are most prominent, it is key management. This is the greatest challenge, because it is very complex and without any security guarantees — the bitcoin deal has no revocation button. Any error in key management may mean a permanent and irreversible loss.”

He went on to say: “Good news is that financial institutions have in principle understood multiple levels of authority. For decades, banks have been using a dual approval system and larger transactions require multiple signatures. Bitcoin multiple signatures are essentially encrypted versions of the concept.”

But Lucien emphasizes that the key difference is: “The challenge lies in the mechanisms of implementation: the principles of mathematics, not internal policies. You cannot be above the rules or make exceptions, which means that governance and signing procedures must be perfect from the outset.”

He analyses one by one the specific problems that keep central bank officials from spending the night: “Who holds the key? What's the threshold for signing? What if someone leaves the agency or an emergency occurs? How can keys be safely rotated? How can backup systems be implemented without introducing new loopholes? Each issue involves the advantages and disadvantages that must be carefully weighed.”

“THESE PROBLEMS CAN BE SOLVED,” LUCIEN PROMISED, “BUT THIS REQUIRES THE ESTABLISHMENT OF ENTIRELY NEW OPERATIONAL CAPABILITIES. THIS IS WHY THE CCB HAS ADOPTED THE SANDBOX APPROACH — IT HAS ENABLED THEM TO ADDRESS THESE CHALLENGES WITH LIMITED RISKS BEFORE THEY EXPAND.”

The unique status of the Czech Republic

As the conversation turned to the Czech Republic, Lucien's enthusiasm for the country's Bitcoin ecosystem became clear. “The existing Bitcoin infrastructure in the Czech Republic is often ignored”, he said. “No encouragement is required from the Czech public, unlike in many countries where central banks are required to direct public acceptance of Bitcoin. They've been using bitcoin enthusiastically for over a decade."

“The Czech Republic has the first mine in the world. The first hardware wallet, Trezor, was also born here, and we have also contributed to many of the bitcoin standards still in use. Prague is often referred to as the world's Bitcoin capital, and there are more than 1,000 places in the country where bitcoin transactions can be made — one of the most concentrated in Europe.”

“This is not just a theoretical application”, Lucien stressed, “it has been integrated into daily business activities. The world's first Bitcoin Congress was held in Prague in 2011, and today the city holds the BTC Prague, the largest pure bitcoin congress in Europe.”

When asked about the regulatory environment, he highlighted a key advantage: “Czech law already supports the spread of bitcoin in a practical way. Holds a bitcoin for three years or more. There is also no tax on the daily payment of bitcoin. These policies show that Governments are aware of the potential of Bitcoin and have created an environment that encourages both long-term possession and easy daily use — rare in the European regulatory framework.”

Lucien offers an interesting perspective on the relationship between public and institutional adoption: “The public level is far ahead of many EU countries. The pilot project of the National Bank of Italy was not intended to encourage public adoption, but rather to catch up with central banks and upgrade their capacity in potential reserve management. This subverts the usual narrative pattern, which is led by monetary authorities and followed by the public.”

Comparison of regulatory approaches

In discussing how other jurisdictions could follow the Czech model, Lucien made an important distinction. “It is essential to understand that two different types of initiatives are often confused”, he explained. “Singapore, Switzerland, the United Arab Emirates, and, increasingly, the United States, have been building a comprehensive regulatory framework for the retail encrypted currency market — including exchanges, hosting service providers, licensing of stable currency issuers, and tokenization of traditional securities.”

HE WENT ON TO SAY: “THE CNB PILOT PROJECT REPRESENTS A FUNDAMENTALLY DIFFERENT SITUATION. THIS IS AN INTERNAL OPERATING EXPERIMENT OF THE CENTRAL BANK ITSELF. IT IS NOT A PUBLIC-ORIENTED REGULATORY FRAMEWORK, BUT RATHER A MATTER FOR MONETARY AUTHORITIES TO HOLD ASSETS ON THEIR OWN BALANCE SHEETS. THESE ARE INDEPENDENT INSTITUTIONAL DECISION-MAKING, NOT NECESSARILY RELATED TO EACH OTHER.”

He emphasized the uniqueness of the Czech approach: “The Czech Republic pursues both approaches simultaneously. They have put in place sound retail rules — bitcoin pays daily tax exemptions and three-year capital gains tax exemptions — and now the Central Bank is actively testing the viability of bitcoin as a reserve. Most jurisdictions follow only one approach, not both.”

When asked about the idea of Czech regulation, Lucien put it bluntly: “It emphasizes learning in practice rather than endless theoretical debate. When other regions were preparing discussion papers and policy recommendations, the Czech National Bank had begun to upgrade its operational capacity directly. This is a pragmatic approach, giving priority to practical experience rather than bureaucratic discussions.”

Implications for the currency ' s future

As I approached the end of the conversation, I asked Lucien what his vision was for the future. “predicting that the precise direction of the global monetary pattern over the next decade to 15 years is speculative,” he said, “but certain fundamentals remain clear. Bitcoin's supply plan and monetary policy are fixed and transparent — you know exactly what you get. The certainty of the statutory currency is much lower because their supply varies according to political decision-making.”

In his view, the early adopters had a significant advantage: “The central banks that understood the role of Bitcoin as a neutral sovereign asset — particularly smaller and more responsive central banks — might gain considerable advantage. They can act faster than large institutions bound by political consensus and bureaucratic inertia, which may give them an advantage in the next currency crisis.”

Lucien stressed: “bitcoin essentially offers the right of choice. Whatever the size of the jurisdiction or institution, it applies to everyone and provides the same guarantees. Whether central banks choose to use this tool in the coming years, and how effectively they implement it, is likely to determine which monetary authorities can operate successfully and which are not sustainable.”

He clarified cautiously: “This is not about replacing statutory currencies with bitcoin; it is about providing an additional option for reserve diversification”

In his concluding remarks, Lucien again referred to the pilot project of the Swiss National Bank: “The institutions that are now starting to build a bitcoin hosting capacity are better placed than those that neglect this area. Although the pilot projects of the Swiss National Bank are small, amounting to only $1 million, their accumulated operational experience may become valuable as currency patterns evolve. In a world where sovereign financial instruments are increasingly scarce, understanding how to host bearer assets without risk to the counterparty represents a significant strategic advantage — one that will accumulate over time.”

“For the time being, this experiment by the Czech National Bank was still only an experiment”, he concluded. “However, its very existence challenges the long-standing recognition of what central banks can and should do. It remains to be seen whether other monetary authorities will follow suit, but the door is open. In monetary policy, as in many other areas, the gap between theory and practice is often more important than the theory itself. The Czech National Bank has chosen practice and has thus provided a reference road map for other central banks that have chosen to explore this path.”