- French lawmaker Sarah Knafo proposed that the European Union establish a strategic Bitcoin reserve in a bid to follow the example of US President-elect Donald Trump.
- Germany’s ex-finance minister echoed similar concerns, lamenting missed opportunities with Bitcoin while the US advances, pointing to Germany’s decision to sell over 50,000 BTC in the summer instead of leveraging its potential value.
French lawmaker Sarah Knafo proposed that the European Union create a Bitcoin strategic reserve to follow the steps of US President-elect Donald Trump.
Speaking in Brussels, Knafo said that EU citizens must be safeguarded against inflation and poor economic policies:
It is time to protect our people from inflation and the poor economic choices of our states.
Sarah KnafoShe later reiterated her stance on X, saying: “No to the digital euro. Yes to a strategic Bitcoin national reserve.”
Knafo is talking about the European Central Bank’s (ECB) plans to introduce a central bank digital currency (CBDC), arguing that the initiative could result in a “dystopian world” where financial transactions are heavily monitored, and individuals risk being excluded from the banking system for making controversial statements on social media.
While she received considerable support from the crypto community, not everyone agreed with her. For instance, Matthias Renault, Deputy of the French National Assembly, said:
A fashionable idea, but even in the United States it is not yet done (and if it is: monopolistic risk).
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Germany’s Ex-Finance Minister Calls for Change
Similarly, Germany’s ex-finance minister Christian Lindner criticised the government’s lack of action on capitalising on Bitcoin’s potential, stating that the country faces competitive disadvantages:
The US will use the advantages that we could also have with Bitcoin. I hear nothing about this in a central debate in the German Bundestag. What an omission, what opportunities are being lost to us.
Christian LindnerGermany’s relationship with Bitcoin has been more than lackluster. For instance, the government sold more than 50,000 BTC in the summer. With BTC’s rise to US$108K (AU$170K), the proceeds could have been roughly US$5B (AU$7.9B). Now that’s a shame.
How Feasible is a Bitcoin Reserve?
In the US, establishing a Bitcoin national reserve would involve retaining US$20 billion worth of BTC seized from criminal activities as a long-term investment for the American public. But how viable is a national Bitcoin reserve? It’s a complex idea with many potential benefits (such as a hedge against inflation, economic stimulus, and price appreciation) but challenges too.
Several analysts are sceptical, and for multiple reasons. First, the absence of a 60-seat Republican majority Senate in the US could be a major barrier, let alone the lack of regulatory laws for crypto and the traditional way of the US government. There are also storage costs, cybersecurity risks, and much more.
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Only time will tell if the upcoming Trump administration will work towards that goal starting in 2025.
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