Czechs are more inclined to store value in cryptos than in euros, according to a new poll gauging attitudes toward currencies other than the koruna. When asked about their intentions to acquire foreign cash, twice as many respondents said they were interested in buying bitcoin than purchasing US dollars.
Cryptos Considered Hard Currencies
Like many other nations, which do not have the luxury of emitting a “hard” national currency, Czechs may consider investing some of their savings in foreign, “convertible”, legal tender, like the dollar or the euro. Surprisingly, a new survey shows neither of these two is the number 1 choice for investment. The study, quoted by local media, was conducted among 525 people this month.
Czechs are still wary of cryptocurrencies, according to the survey. Nevertheless, cryptos, like bitcoin and ethereum, have become the most popular currencies, when it comes to investment opportunities. Almost 11% of the respondents in an Ipsos poll admitted they were thinking about acquiring digital coins. Fewer Czechs said they would consider buying euros – 10.3%.
Since its “liberalization”, the Czech koruna (CZK) has been fairing pretty well. It appreciated against the euro after the Czech National Bank lifted the cap last April. Almost a third of Czech people (30%) trust their free-floating fiat now, the survey found out. The second most trusted traditional currency in Czechia is the Swiss franc (26%).
Left unchecked, however, the koruna may depreciate at some point. When a national currency goes down, prices of imported goods inevitably go up. With floating koruna, Czechs may start to look around, more often than before, for alternatives to diversify their investments and spread the risk for their savings.
Bitcoin Also Wanted As Cash
The euro might sound like an obvious choice, but it has never been very popular with the Czech people. Several years ago, the government in Prague suspended indefinitely plans to adopt the common European currency. Multiple surveys have indicated a very low public support for entering the Eurozone, well below 20%. The Ipsos poll for Topforex also found that the euro has slipped to third place among trusted fiat currencies in the Czech Republic.
When respondents were asked if they planned to purchase foreign currency in cash, more than half said they had no intentions to do so. A third of those who want to buy said they would acquire euros. Many of their country’s neighbors, like Slovakia, have adopted the euro and visiting Czechs would need the European cash. 8.4% of the interviewed, however, stated they were planning to acquire digital cash in the form of cryptocurrencies – twice as many as those who said they were going to buy US dollars in the near future (4.2%).
Last year the Czech National Bank tried to downplay the importance of cryptocurrencies and their potential to marginalize traditional money. The financial authority claimed there was no reason for banks to fear bitcoin. A “good currency”, CNB argued, has a stable purchasing power. All bitcoin transactions in the world amount to only 16% of the electronic transactions conducted in the Czech koruna, the bank noted.
A couple of months ago Czech media reported the first sale of real estate for bitcoin in the country. A Russian citizen bought an apartment in Prague for 35 bitcoins. “One of his conditions was to pay with bitcoin”, Jaroslav Kováč, founder of the company that sealed the deal, told Hospodářské noviny. The realtor also said he was negotiating other sales in bitcoin with interested Czech and foreign clients. Earlier last year the largest online retailer in the country started accepting bitcoin… Now, is this a “good currency” or what?
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Author: Lubomir Tassev