Historically, Europe’s wealth has been quantified in gold and bonds. However, two of its prominent economies are poised to introduce a new element to their strategic reserves.
This week, it was revealed that leaders in Germany and France have each proposed plans to create a national Bitcoin reserve, a move that has the potential to reshape state reserve frameworks.
This initiative represents the first significant effort by major European nations to recognize BTC as a sovereign asset.
Bitcoin Reserve Initiatives by France and Germany
France’s proposal was the first to emerge and is notably detailed.
On October 28, Éric Ciotti, President of the Union de la Droite Républicaine (UDR), delineated an ambitious strategy for the country to acquire up to 420,000 BTC over seven to eight years, which represents around 2% of Bitcoin’s total supply.
The following day, Germany’s Alternative für Deutschland (AfD) reportedly introduced a motion advocating for Berlin to consider a national Bitcoin strategy as a safeguard against inflation and geopolitical tensions.
Together, these efforts indicate a groundbreaking shift and the beginnings of a European Bitcoin reserve competition. This could alter the continent’s monetary landscape and challenge gold’s longstanding dominance in national asset portfolios.
Details of the Bitcoin Reserve Proposals
Germany’s motion is directly based on central bank reserve principles.
It posits that Bitcoin’s decentralized issuance and reliable supply present it as a natural counterpart to gold, especially as European economies deal with ongoing inflation and a declining euro.
Furthermore, Bitcoin’s attributes resonate with broader themes of monetary independence and technological advancement, positioning the asset as a long-term reserve that could protect national balance sheets from systemic shocks.
While the motion lacks specifics regarding purchase amounts, experts estimate it could reach billions of euros, particularly in light of discussions around US reserves and El Salvador’s example.
Conversely, France’s strategy is more ambitious and institutional-focused.
Ciotti’s UDR party aims to establish a Bitcoin Strategic Reserve under the purview of the Finance Ministry.
The initiative would see France accumulate 420,000 BTC over the period from 2025 to 2032 using a gradual, dollar-cost-averaging acquisition strategy. This method is intended to mitigate volatility risks while enhancing national sovereignty.
Funding for the acquisition would be derived from four primary sources:
- Public mining operations leveraging excess nuclear and hydroelectric resources,
- Retention of confiscated Bitcoins instead of liquidating them,
- Allocation of a quarter of daily inflows from Livret A and LDDS savings accounts — translating to approximately €15 million daily for Bitcoin purchases,
- And the option for citizens to pay taxes in Bitcoin, fostering organic on-chain inflows.
The legislation aims to establish a national “digital gold” reserve. This diverse, non-correlated hedge is designed to decrease France’s reliance on the dollar while modernizing its asset structure.
The proposal links Bitcoin accumulation to a broader philosophy of monetary sovereignty. It explicitly sets BTC as a counterbalance to dollar-centric global finance and as a catalyst for France’s financial autonomy within the European Union.
Rationale Behind the Bitcoin Reserves
The timing is telling. Germany and France are currently experiencing increased fiscal pressures, energy dependencies, and currency volatility within the eurozone.
For policymakers, Bitcoin represents a symbolic and potentially pragmatic avenue for financial independence amid geopolitical instability.
For the AfD, the initiative aligns with its broader nationalist agenda of reducing reliance on the European Central Bank and regaining control over domestic reserves. For France, the approach is more pragmatic, focusing on integrating Bitcoin into government holdings as part of the financial digitalization process.
The dual proposals also underscore a significant philosophical rift within Europe.
On one side, technocratic officials in Brussels continue to perceive cryptocurrencies primarily through the lens of regulation and risk.
On the other, a growing faction of lawmakers views them as foundational elements of digital sovereignty, providing nations with protection against both US monetary influence and eurozone structural vulnerabilities.
Anna, a crypto analyst with Sovereign Stash, characterized the developments as a logical progression within the market:
“The core thesis of Bitcoin is being validated. The world is gradually shifting towards scarcity, ownership, and sovereignty.”
The Strategic Rationale for Bitcoin Reserves
Throughout most of the past century, gold has been regarded as the ultimate defense against inflation and currency devaluation. Central banks held it for profit and as a symbolic assurance of their solvency and independence. Bitcoin now shares this narrative space.
Unlike fiat reserves, BTC cannot be devalued or confiscated by foreign entities, and its limited supply presents it as a viable inflation hedge for states grappling with soaring debt.
Additionally, its on-chain verifiability offers a transparency advantage lacking in traditional reserve assets.
If France were to proceed with its plan to acquire 420,000 BTC, it would swiftly become the largest sovereign holder of Bitcoin, surpassing all corporate treasuries and even the US government’s confiscated assets. At current valuations, that allocation would exceed $25 billion, roughly 15% of France’s gold reserves.
This level of accumulation could also impact Bitcoin’s macro-liquidity profile. A mere 1-2% allocation by G20 nations could remove millions of BTC from circulation, constricting supply and potentially initiating a long-term price adjustment.
However, the strategic advantages come accompanied by familiar risks of market volatility, custodial security, and the perception issues associated with holding a digital asset commonly linked to retail speculation.
Despite this, a Deutsche Bank report anticipates that Bitcoin will coexist alongside gold on central bank balance sheets by 2030, noting decreased volatility and growing recognition of BTC as a legitimate, non-sovereign reserve asset.
