In a landmark move for Europe's financial landscape, Luxembourg has officially added Bitcoin to its national reserves, positioning itself as a pioneer in sovereign cryptocurrency investment.

Luxembourg has become the first European country to officially add Bitcoin to its national reserves. The decision was confirmed by Minister of Finance Gilles Roth during the presentation of the 2026 budget.

1% of the portfolio in crypto: a strong signal

The Sovereign Intergenerational Fund (FSIL), which manages a portion of the Grand Duchy's wealth, will allocate approximately 1% of its portfolio – over €7 million – to Bitcoin Exchange-Traded Funds (ETFs). Bob Kieffer, Director of the Treasury, described the move as a strategic one, stating that "ETFs allow us to avoid the risks associated with holding Bitcoin directly."

This allocation signals a significant shift for the Grand Duchy, a country traditionally known for its financial prudence. The move aligns with its broader ambition to establish itself as a European hub for FinTech and crypto-assets. The country's early adoption of the EU's MiCA (Markets in Crypto-Assets) regulation, which allows licenced firms to operate across the bloc, has already positioned it as an attractive destination for companies in the sector.

"As a country with a long-term vision, this is a logical step," said MP Laurent Mosar of the Christian Social People's Party (CSV), adding, "It sends a strong signal to institutional investors."

A global trend, but not without risks

Luxembourg's decision reflects a growing, though cautious, global trend. Sovereign wealth funds in Norway, the UK, Finland, and parts of Asia and the Middle East have also begun exploring cryptocurrency investments. Czechia has recently indicated it may transfer billions of euros into Bitcoin.

However, the strategy is not without its risks. Despite Bitcoin's recent performance, financial experts caution that its well-documented volatility could pose a threat to the stability of national reserves in the event of a sharp market downturn.

By taking this step, Luxembourg is positioning itself as a pioneer in Europe's digital asset space, balancing innovation with a measured level of risk. The long-term impact of this decision on both the markets and European crypto regulation remains to be seen.