In a recent speech before the European Parliament, French magistrate and European lawmaker Sarah Knafo called on the European Union to establish a strategic Bitcoin reserve while rejecting the proposed adoption of the ‘digital euro,’ a central bank digital currency (CBDC) under development by the European Central Bank (ECB).
A Pro-Bitcoin Speech
Knafo’s speech, which was posted on X and included a video of her presentation before the EU Parliament, highlighted the need for the European Union to adopt a decentralized approach to cryptocurrency regulation. She emphasized that it is time to stop "totalitarian temptations" by the ECB and instead focus on adopting the decentralized nature of Bitcoin.
"No to the digital euro, yes to a strategic Bitcoin reserve," Knafo declared in her speech.
Comparing Crypto Regulation Developments Worldwide
Knafo compared crypto regulation developments worldwide, citing El Salvador’s adoption of Bitcoin as legal tender in 2021 and the crypto-friendly agenda of United States President-elect Donald Trump’s incoming administration. She also mentioned that US Federal Reserve Chair Jerome Powell referred to Bitcoin as "digital gold" in early December.
However, Knafo pointed out that Europe has taken a different approach to crypto regulation, with local regulators focused primarily on regulation, taxation, and stifling innovation.
"It is time to change the paradigm," Knafo said. "It is time to protect our people from inflation and the poor economic choices of our states. It is time to say no to the totalitarian temptations of the European Central Bank, which wants to impose a digital euro entirely in its hands."
Knafo warned that adopting a CBDC like the digital euro could lead to a dystopian world where European bureaucrats have control over citizens’ financial transactions.
"We do not want this dystopian world where a European bureaucrat will be able tomorrow to ban certain transactions and even eliminate us from the banking system with a click for a simple comment made on social networks or for an opinion that displeases," Knafo said. "It is time to bet on freedom."
ECB’s Digital Euro Plans
The ECB has been studying the concept of a CBDC for more than four years, but the EU has yet to decide on launching a digital euro. The European Central Bank published one of its first reports dedicated to a potential digital euro in October 2020, starting a long-running examination of its potential and risks.
European authorities have been struggling with a decision on a digital euro as many have expressed concerns about its privacy risks, possible threats to private payment firms, and other issues. In its latest rulebook, the ECB said it continues preparations for a potential digital euro launch and expects to make a final decision on the matter by October 2025.
A Strategic Bitcoin Reserve
Knafo’s call for a strategic Bitcoin reserve is part of a growing trend among lawmakers and experts who recognize the potential benefits of cryptocurrency adoption. A strategic Bitcoin reserve would allow countries to hold and manage their own Bitcoin reserves, providing a hedge against inflation and economic uncertainty.
In an interview with Infinex, Kain Warwick, founder of DeFi lending platform Aave, said that cryptocurrency has four years to grow so big "no one can shut it down." Warwick’s comments highlight the importance of adopting decentralized approaches to finance and embracing innovation in the crypto space.
Conclusion
Knafo’s speech before the EU Parliament highlights the growing divide between those who support a centralized approach to cryptocurrency regulation, like the ECB’s proposed digital euro, and those who advocate for a more decentralized approach, like Knafo’s call for a strategic Bitcoin reserve. As the European Union continues to grapple with decisions on cryptocurrency regulation, it is clear that the debate will be a contentious one.
Recommendations
- The European Union should establish a strategic Bitcoin reserve to provide a hedge against inflation and economic uncertainty.
- Regulators should adopt a decentralized approach to cryptocurrency regulation, focusing on protecting consumers and promoting innovation in the crypto space.
- The ECB’s plans for a digital euro should be reevaluated in light of concerns about privacy risks and possible threats to private payment firms.
Additional Resources
- El Salvador plans Bitcoin policy changes to secure $1.3B IMF loan
- [Crypto has 4 years to grow so big ‘no one can shut it down’: Kain Warwick, Infinex](https://cointelegraph.com/exclusives/crypto-has-4-years-to-grow-so-big-no-one
