The Czech Republic’s eyeing Bitcoin and Stablecoins on Bitcoin are coming

The Czech Republic is becoming a Bitcoin hub with recently introduced laws favoring Bitcoin HODLers and the central bank showing interest in adding BTC to its national treasury. 

I knew that once the U.S. started seriously talking about starting a strategic Bitcoin reserve, other countries would follow suit. And now, it looks like it’s happening! 

What’s also happening in the world of digital assets is that stablecoins are making their way to Bitcoin, specifically to Plasma–a new purpose-built Bitcoin sidechain for stablecoins payments. 

Let’s talk about that! 

The Czech Republic is nurturing HODLers, and its central bank might soon add Bitcoin to the balance sheet 🇨🇿

The last few weeks in the news cycle have been dominated by a potential strategic crypto reserve in the U.S. I’ve also written about this in my previous newsletter issue. 

As it stands, we don’t have an exact date when the U.S. digital asset reserve could become a reality, but the newly formed presidential working group is ironing out the details of how to make it happen. 

This month, though, we saw a new country entering the talk, and it’s not one of the usual contenders, such as China or Russia, but rather the Czech Republic. 

In the autumn of 2024, we had already read rumors that the Czech government might introduce a bill that would make BTC HODLed tax-free for over three years. 

The bill has now been passed and written into law! 💪

The Czech President, Petr Pavel, announced the new law on February 7. The amendment will take effect in mid-2025 and align the country’s new regulation with the European MiCA rules. 

This change represents a new approach by the Eastern European country to modernize its tax regulation and make the Czech Republic a hub for Bitcoin and digital assets.

But that’s not everything; there is even more bullish news for Bitcoin!

Aleš Michl, head of the Czech National Bank, announced that he’s eager to spend billions of Euros to buy Bitcoin and use it as a strategic reserve. 

Michl sees great potential in Bitcoin and wants to use it to diversify the Czech Republic's balance sheet. 

The national bank proposed investigating the possibilities of using Bitcoin, and the committee accepted it. Just like in the U.S., a task force will now examine how to proceed. 

This is incredible news, considering that a law now exists that will encourage HODLing Bitcoin and the potential use of BTC as a reserve asset. 

I’m eager to follow the developments of this story. The Czech Republic might become the first nation-state with a strategic Bitcoin reserve. 

Plasma will bring billions of people to the Bitcoin network with stablecoins 🚀

Chances are, if you read this newsletter, you also follow me on social media or have seen one of my posts. 

I often cover the latest news in the Bitcoin industry, comment on interesting political developments, or offer my perspective based on my over ten years of experience.

One of my most eye-opening experiences was my trip to Columbia. There, I saw firsthand how citizens in emerging markets use Bitcoin and stablecoins. 

While you could buy a bottle of water with Bitcoin at a few food stands, you would more likely be able to pay for goods with stablecoins. 

They’re one of the biggest success stories in crypto, as they expose everyone to the Dollar system, which, with its flaws, is still the world’s reserve currency. 

I’m fully convinced that Bitcoin is the ultimate game-changer, but the technology and adoption are not yet available, and we are unable to use it on a daily basis. 

That's why stablecoins are essential. 

However, they all have a significant flaw: They’ve been mainly running on heavily centralized and unreliable blockchain networks, whereas ideally, we want stablecoins to run on Bitcoin–the most secure crypto network in the market.  

And this is where Plasma comes in! 

Plasma is a Bitcoin sidechain, purpose-built for stablecoin transactions at a global scale.  

Founded by Paul Faecks and Christian Angermayer, Plasma officially launched this month and announced a $24 million seed and series A round. Investors include Bitfinex, Tether, Bybit, Peter Thiel, and several others. 

While there is often demand for more layer solutions on top of Bitcoin for use cases like DeFi or tokenization, Plasma focuses on driving global stablecoin adoption by using Bitcoin as the base layer and a gateway for low-cost, international payments. 

Built from the ground up to meet the specific needs of stablecoins, Plasma offers a scalable, efficient, and secure foundation for the future of money movement.

This is huge because it will mean that anyone in the world can transact in de facto digital dollars running on the most secure, open financial network in the world. 

Your fellow stacker in sats, 

Patrick Lowry