Czech central bank buys $1 million in bitcoin, other crypto assets for testing.

The Czech central bank said on Thursday it had bought $1 million of bitcoins and other blockchain-based digital assets to gain experience with digital markets, and will evaluate the project in two to three years.

The portfolio is mostly made up of bitcoins, but also includes U.S. dollar-based stablecoins and a tokenised deposit, all bought through a regulated exchange it said, without giving specifics on the market used or exact assets.

“The purpose of the portfolio is to gain practical experience with holding digital assets and to implement and test the necessary related processes,” the bank said.

It will be held separately from the bank’s international reserves, and will not be actively increased.

“In the test portfolio, the central bank will test the whole chain of processes associated with the purchase, holding and management of digital assets – from technical administration of keys and multi-level approval processes, through crisis scenarios and security mechanisms, to verifying anti-money-laundering compliance,” the bank said.

The bank said it would assess the project, leaving open the question of whether digital assets could become part of reserves in the future, and in what form.

The CNB’s first idea of looking at bitcoins for reserves received a cold reception from the European Central Bank, whose President Christine Lagarde said she believed bitcoins would not become reserve assets of EU members.

Although the Czech Republic does not use the euro, it is part of the European Union and its system of central banks.

Source: Reuters