Luxembourg becomes the first EU country to buy bitcoin

Luxembourg has made history as the first eurozone country whose sovereign wealth fund has officially invested part of its assets in bitcoin ETFs. Finance Minister Gilles Roth announced that the country’s intergenerational sovereign wealth fund (FSIL) has placed 1% of its assets in bitcoin through exchange-traded funds. This decision became possible due to the revised investment policy of the fund, approved by the government in July 2025, which allows placing up to 15% of assets in alternative investments, including cryptocurrencies. A spokesperson for the Luxembourg Financial Center Development Agency confirmed that this is the first time a eurozone country has invested public funds in bitcoin at the level of a sovereign fund.

Jonathan Westhead, Head of Communications at the Luxembourg Finance Agency, explained the reasons for the decision: the country recognizes the growing maturity of this new asset class and emphasizes its leadership in digital finance. The intergenerational sovereign wealth fund, established back in 2014 to create a reserve for future generations, has modest assets of $ 730 million by European standards. Most of the fund’s investments have traditionally been concentrated in high-quality bonds, but the new policy opens the door to diversification through private equity, real estate, and crypto assets.

An important detail is the investment method: to avoid operational risks, the fund chose an indirect route through ETF products rather than buying bitcoin directly. This allows the fund to take advantage of regulated financial instruments that are traded on traditional exchanges and ensure transparency of operations. This approach is especially important for government entities that must adhere to strict standards of public funds management and accountability to citizens. Luxembourg, being one of the least populated countries in Europe with approximately 682 thousand inhabitants, has traditionally positioned itself as an innovative financial hub.

While some European countries, such as Finland and the UK, also hold bitcoins, most of these assets come from criminal confiscations rather than a deliberate investment strategy. The exception is Georgia, a country outside the eurozone, which holds 66 BTC for investment purposes. Luxembourg’s decision is fundamentally different — it is the first time that a eurozone member state has officially included cryptocurrencies in its sovereign wealth fund portfolio as part of a long-term investment strategy.

This move could serve as a catalyst for other European countries that are watching the situation around bitcoin and other digital assets. In the context of the growing institutional interest in cryptocurrencies, with bitcoin ETFs in the US attracting billions of dollars every month, Luxembourg’s decision looks like a recognition of cryptocurrencies as a legitimate asset class at the highest state level. If the experiment proves successful, we can expect other small European countries with developed financial sectors to follow suit, shaping a new paradigm for public investment in the digital age.