EU lawmaker Sarah Knafo has called for Bitcoin to be established as a strategic reserve, citing its decentralized nature and limited supply as key strengths in hedging economic uncertainty.
With Bitcoin gaining increasing recognition as a store of value and hedge against inflation, many now view it as a potential addition to national reserves, alongside assets like the US dollar, European euro, and US treasuries.
During a parliamentary meeting on Tuesday, December 17, Sarah Knafo, a member of the European Parliament, delivered a pro-Bitcoin speech, advocating for establishing a “Bitcoin strategic reserve” within the European Union.
Knafo Calls for Bitcoin Reserve amid Regulatory Advancements
While the European government has introduced a uniform regulatory framework, the Markets in Crypto-Assets (MiCA), to govern the issuance, offering, and trading of cryptocurrencies within the EU market, no European Union member state has yet officially recognized Bitcoin as a reserve asset.
Knafo, however, emphasized during her speech that Bitcoin’s decentralized nature, finite supply of 21 million, and growing global adoption make it an attractive option for governments looking to diversify reserves and hedge against economic uncertainties.
BREAKING: 🇪🇺 European MP gives pro-#Bitcoin speech in the European Parliament calling for a "Strategic Bitcoin Reserve".
❌NO to the digital euro
✅ YES to a strategic reserve of BITCOIN 🔥 pic.twitter.com/NAO0nupol9— Bitcoin Archive (@BTC_Archive) December 17, 2024
She further referenced recent remarks by Federal Reserve Chair Jerome Powell, who compared Bitcoin BTC $93 991 24h volatility: 0.9% Market cap: $1.87 T Vol. 24h: $25.96 B to gold. Powell suggested that Bitcoin possesses qualities more akin to gold than the US dollar.
“People use bitcoin as a speculative asset… It’s just like gold, only it’s virtual, it’s digital. People are not using it as a form of payment or as a store of value. It’s highly volatile. It’s not a competitor for the dollar, it’s really a competitor for gold,” he said at the just concluded DealBook Summit.
Knafo Opposes Digital Euro, Supports Bitcoin Reserve
When asked about the potential inclusion of Bitcoin in US reserves, Powell reaffirmed the Federal Reserve’s primary objective of maintaining the safety and soundness of the banking system.
Despite this stance, Knafo remains convinced of Bitcoin’s value as a strategic reserve for Europe. She also rejected the idea of introducing a central bank digital currency (CBDC) in the form of a digital euro, which remains under consideration within the EU.
Knafo’s speech sparked significant debate within the crypto community. Members of crypto Twitter widely praised the proposal, with some arguing that adopting Bitcoin as a strategic reserve would give Europe a competitive edge over other global powers.
“I genuinely believe Bitcoin as a strategic reserve would give Europe a massive competitive advantage over other global powers in the next decade,” one user commented.
Bitcoin as National Reserve: Global Momentum Builds
While debates continue regarding Bitcoin’s efficacy as a hedge against inflation, some nations have already embraced the digital asset. Notably, El Salvador and the Central African Republic (CAR) have adopted Bitcoin as legal tender, positioning it as an official currency to be used for goods and services within the nations.
On December 9, 21Shares, a leading global financial services company, projected that Argentina could be the next country to adopt Bitcoin as part of its sovereign reserves. The company asserted that Bitcoin holds significant potential as a reserve asset for central banks worldwide.
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