Is the EU Bitcoin competition about to start? France bets $25 billion, Germany proposes to reserve BTC.

For decades, wealth in Europe has been measured in gold and bonds. Today, the two largest economies in Europe are preparing to add new assets to their strategic reserves. This week, reports emerged that political leaders in Germany and France have proposed the establishment of national Bitcoin reserves, a move that could redefine the framework of national reserves.

The EU Bitcoin competition is about to start? France's target of 420,000 coins shocks the market

(Source: French National Assembly)

France's initiative is the first to be proposed, and the details are very thorough. The UDR party, led by Jody, has proposed the establishment of a Bitcoin strategic reserve under the supervision of the Ministry of Finance. The plan aims for France to accumulate 420,000 Bitcoins between 2025 and 2032 through a gradually implemented dollar-cost averaging acquisition strategy. This move is intended to reduce volatility risks while enhancing national sovereignty.

If France ultimately implements its plan to purchase 420,000 Bitcoins, it will immediately become the largest sovereign holder of Bitcoin, surpassing all corporate treasuries and even exceeding the amount of Bitcoin held by the U.S. government that has been seized. At current prices, this batch of Bitcoin is worth over $25 billion, accounting for about 15% of France's gold reserves.

Four Major Funding Sources for Bitcoin Accumulation in France:

Public Mining Operations: Utilizing surplus nuclear energy and hydropower for Bitcoin mining, transforming energy advantages into digital assets.

Judicial Seizure Reserve: Reserve the Bitcoin seized by law enforcement agencies instead of liquidating it for auction.

Savings Account Diversion: Allocate one quarter of the daily inflow of funds from Livret A and LDDS savings accounts (approximately 15 million euros per day) to purchase Bitcoin.

Tax Innovation: Citizens can choose to pay taxes with Bitcoin, creating a natural inflow of on-chain funds.

The bill aims to establish a national “digital gold” reserve. This diversified, uncorrelated hedging strategy is designed to reduce France's dependence on the dollar while modernizing the asset structure. This article links the accumulation of Bitcoin to broader theories of monetary sovereignty, clearly positioning Bitcoin as a force against the dollar-based global financial system and as a tool to accelerate France's financial independence within the European Union.

This accumulation may also affect the macro liquidity situation of Bitcoin. Even if the G20 member countries allocate only 1-2% of Bitcoin, it could absorb millions of Bitcoins from circulation, thereby tightening supply and potentially triggering a long-term price reevaluation. A continuous buying pressure of 15 million euros per day will create stable and predictable demand in the market, providing structural support for the price of Bitcoin.

Germany's cautious follow-up and strategic considerations

Germany's measure is directly derived from the central bank's reserve principle. This indicates that the decentralized issuance and predictable supply of Bitcoin make it a natural complement to gold, especially as European economies struggle to cope with persistently high inflation and the weakness of the euro.

The Alternative for Germany (AfD) has proposed a motion recommending that Berlin explore the development of a national Bitcoin strategy to hedge against inflation and geopolitical instability. Although the motion does not specify the scale of purchases, analysts believe that the purchase scale could reach billions of euros, especially if it follows the discussions on U.S. reserves and the precedent set by El Salvador.

Furthermore, the characteristics of Bitcoin reflect broader themes of monetary sovereignty and technological advancement, making this asset a long-term reserve that can shield national balance sheets from systemic shocks. For the Alternative for Germany party, this initiative aligns with its broader nationalist ideology of reducing dependence on the European Central Bank and strengthening control over domestic reserves.

The proposal from Germany, although not as detailed as that of France, carries significant symbolic meaning. Germany is the largest economy in Europe, and its recognition of Bitcoin will set an example for other EU member states. If both France and Germany establish Bitcoin reserves, other EU countries may follow suit, creating a chain reaction.

The Strategic Logic and Risks of Bitcoin Reserves

For most of the past century, gold has been the ultimate hedge against inflation and currency devaluation. Central banks hold gold both to gain profits and to symbolically demonstrate their solvency and independence. Today, Bitcoin occupies a similar narrative position.

Unlike fiat currency reserves, Bitcoin cannot be devalued or seized by foreign powers, and its limited supply makes it a potential hedge against inflation for countries facing ever-expanding debts. Furthermore, its on-chain verifiability provides a transparency advantage that traditional reserve assets lack. Anyone can verify the amount of Bitcoin held by a nation on the blockchain, a level of transparency that is impossible in traditional gold reserves.

The timing is not coincidental. Germany and France are both facing increasing fiscal pressures, energy dependence, and currency fluctuations within the Eurozone. For policymakers, Bitcoin offers a symbolic financial autonomy tool that may have practical value in the current era of geopolitical uncertainty.

However, strategic advantages come with risks. Market volatility is the most obvious challenge, as the price of Bitcoin may fluctuate dramatically in the short term, posing challenges for national asset-liability management. Custody security is equally crucial; how to securely hold hundreds of billions of dollars in Bitcoin, preventing hacking and internal theft, requires the establishment of a brand new security system. Political influence cannot be ignored either, as holding digital assets (often associated with retail speculation) may provoke public scrutiny and political backlash.

Even so, a report from Deutsche Bank predicts that by 2030, Bitcoin will appear on the balance sheets of central banks alongside gold. The report indicates that Bitcoin's volatility is decreasing, and people are increasingly accepting Bitcoin as a legitimate non-sovereign reserve asset.

These proposals also highlight deeper philosophical divides within Europe. On one hand, Brussels' technocratic policymakers continue to view cryptocurrencies from a regulatory and risk perspective. On the other hand, a group of emerging legislators sees them as the foundation of digital sovereignty, capable of shielding countries from the effects of U.S. monetary dominance and the structural weaknesses of the Eurozone.

Sovereign Stash's cryptocurrency analyst Anna described these developments as a natural evolution of the market: “The core idea of Bitcoin is being validated. The world is slowly moving towards scarcity, ownership, and sovereignty.” These initiatives collectively signal an unprecedented situation, the EU Bitcoin race is about to begin, which could reshape the monetary landscape of the European continent and challenge gold's dominant position in asset allocation across countries.