Germany Considers Issuing Government Bonds on the Blockchain, Adding Bitcoin (BTC) to Strategic Reserves

Patrick Hansen, Circle’s Senior Director of EU Strategy & Policy, shared some insights from a recent Blockchain Roundtable in the German Parliament, where policymakers discussed the country's potential adoption of Bitcoin (BTC).

According to Hansen's post on X, Germany's former finance minister, Christian Lindner, highlighted three possible next steps for Germany or the EU to become more competitive in the digital currency space.

The first suggestion was for the German government to issue bonds on the blockchain. This would entail using blockchain technology to issue government bonds for greater efficiency and transparency in the bond market. Such a move could position Germany as a leading nation in issuing blockchain bonds.

A second option would involve Germany or the EU deciding to hold Bitcoin as a strategic reserve asset. If agreed upon, this would align with the recent interest shown by governments around the world in adopting the asset as a store of value and a hedge against inflation.

Another route, suggested as a third option by Lindner, is for Germany to enable Bitcoin exchange-traded funds (ETFs) in the EU. This could provide accessible, regulated, and mainstream investment vehicles for both institutional and retail investors.

The goal is to encourage greater adoption and liquidity in the cryptocurrency market. Currently, the European market lacks Bitcoin ETFs and offers BTC through exchange-traded notes (ETNs) or exchange-traded commodities (ETCs).

This recent blockchain roundtable, organized by the German Federal Parliament, comes about six months after the authorities engaged in massive Bitcoin sales. As covered by Finbold in July 2024, the authorities embarked on sales of about 50,000 BTC in its stash, which it confiscated from operators of the Movie2k piracy website.

The offloading of that large volume of Bitcoin onto the market had a significant impact on the price of Bitcoin, with the asset declining from around $70,000 to $56,000.

As of this writing, Bitcoin is trading at $94,888.47, showing a slight decrease over the past 24 hours as it struggles to reclaim the $100,000 mark. Some analysts believe that Bitcoin is currently in the distribution phase, and the price will pick up once it is over.