A European parliamentarian is calling for the EU to adopt a national Bitcoin reserve, arguing that it could shield citizens from inflation and overreach, following in the footsteps of El Salvador’s controversial decision to make Bitcoin legal tender.
In a stirring speech before the European Parliament, Sarah Knafo, a French magistrate and member of the European Parliament since June, has urged EU leaders to establish a strategic Bitcoin reserve, rejecting the proposed digital euro — a central bank digital currency (CBDC) being developed by the European Central Bank (ECB).
With Bitcoin hitting a new record high of over $108,000 recently, Knafo’s call for a national Bitcoin reserve comes at a time when the world’s largest cryptocurrency is experiencing an unprecedented surge. She insists that European citizens deserve to be insulated from the rising inflation that is biting hard at many economies, adding that traditional state-controlled economic systems are failing to protect the public.
“We must stop the ongoing economic devastation caused by ineffective policies. It is time to protect our people from inflation and the poor economic choices of our states,” Knafo said in her speech. She went on to post a message on X (formerly Twitter), echoing her concerns about Europe’s economic future under the threat of a centrally controlled digital euro.
Knafo’s opposition to the digital euro stems from her belief that CBDCs, being controlled by central banks, could lead to a “dystopian world” where citizens’ financial activities are closely monitored. She warns that the ECB’s push for a digital euro would give authorities unprecedented power to track transactions, raising concerns about privacy and the freedom of speech, particularly in light of social media surveillance.
"It is time to bet on freedom,” Knafo asserted. “No to the digital euro, yes to a strategic Bitcoin reserve.” She went on to argue that Bitcoin, with its decentralised nature, provides a more reliable hedge against inflation and is the path forward for Europe. “Let us stop these totalitarian temptations,” she added, referencing growing calls for state intervention in crypto markets across the continent.
The backdrop to this debate is the contrasting approach to crypto regulation in Europe and the United States. While the U.S. has begun to embrace the idea of a national Bitcoin reserve, spearheaded by figures such as Donald Trump and his allies, European regulators have remained focused on regulation, taxation, and stifling innovation. Knafo’s speech highlights this growing divergence, with the U.S. considering Bitcoin as a strategic asset while Europe seems increasingly fixated on containing the digital currency rather than embracing it.
Knafo pointed to the example of El Salvador, where President Nayib Bukele’s decision to make Bitcoin legal tender in 2021 was met with widespread international criticism. Yet, despite the disapproval from figures like U.S. politicians and the International Monetary Fund, El Salvador’s Bitcoin experiment has proved successful. The country has already seen over $300 million in unrealised profits from its Bitcoin holdings, a sum that continues to grow as the cryptocurrency’s price surges.
“This is the model that Europe should consider. It is bold, and it is successful,” Knafo said. “El Salvador’s economic fortune has turned, and the people are benefiting.” Her call for a Bitcoin reserve comes as she advocates for a radical shift in the EU’s economic strategy, suggesting that it could be time for Europe to follow the example set by Bukele’s administration.
The momentum for a national Bitcoin reserve is not limited to Knafo’s vision for Europe. The notion has gained traction worldwide, particularly in the United States, where calls for a strategic Bitcoin stockpile are increasingly common. Following Donald Trump’s victory against Kamala Harris last month, his administration’s plans to create a Bitcoin reserve are moving closer to realisation.
The influence of the U.S. is not lost on international lawmakers. Binance’s former CEO, Changpeng Zhao, recently suggested that the U.S. Bitcoin reserve policy would set a precedent that would influence countries around the globe. “If the U.S. does this, then every other country will have to do this,” he said during the Bitcoin MENA conference last week.
Brazil has already moved to submit legislation to create its own Bitcoin reserve, while Japan is exploring similar proposals. Japanese lawmaker Satoshi recently presented a formal request to Japan’s legislature, calling for a national discussion on developing a Bitcoin reserve.
As the debate on Bitcoin’s place in the global economy intensifies, Knafo’s bold call for a strategic Bitcoin reserve serves as a clarion call to European leaders: it is time to embrace decentralisation and distance themselves from the overreach of central banks. Only time will tell whether Europe will heed her advice, or whether it will continue down the path of regulatory control, leaving citizens to bear the burden of a failing economic system.