The Czech Republic is moving towards becoming a crypto-friendly hub within the European Union by implementing new legislation regarding digital assets.
The law aims to clarify crypto tax regulations, align with EU standards, and potentially add Bitcoin to its national reserves.
Czech President Petr Pavel signed a bill exempting crypto users from paying taxes on crypto assets held for more than three years.
Additionally, taxpayers will not be required to report transactions valued at less than 100,000 koruna (approximately $4,100 USD) per year.
This aligns the country's regulations with the EU's Markets in Crypto-Assets (MiCA) framework.
According to the Czech Cryptocurrency Association (CKMA), the new legislation simplifies crypto tax rules and implements the EU’s Markets in Crypto-Assets (MiCA) regulation "in a way that supports innovation and development of the entire industry."
The Czech National Bank (CNB) is also considering adding Bitcoin (CRYPTO:BTC) to its foreign reserves.
Aleš Michl, head of the CNB, proposed allocating up to 5% of the bank's reserves to Bitcoin.
At this rate, the CNB could acquire up to $7.3 billion worth of BTC.
Michl stated that the CNB aims for price stability and is diversifying its reserves into non-correlated assets.
"An asset under consideration is Bitcoin. It currently has zero correlation to bonds and is an interesting asset for a large portfolio. Worth considering," said Michl.
František Vinopal, the chairman of the CKMA, said the government’s proposal was “unthinkable a few years ago, but now all present lawmakers have agreed.”
This unity results from the association’s efforts and the Czech crypto community.
The new legislation introduces the right for cryptocurrency companies to access bank accounts if they pass the licensing process.
However, the move to include Bitcoin in national reserves was not well received by the president of the European Central Bank, Christine Lagarde, who said she's confident Bitcoin won't be entering the reserves of any of the EU central banks.