German legislator and cryptocurrency advocate Joana Cotar has called on the national government to halt its rapid liquidation of Bitcoin assets. Instead, she suggests embracing Bitcoin as a “strategic reserve currency” to safeguard against vulnerabilities within the conventional financial system.
In a communication dated July 4, Cotar appealed to her government colleagues, “[I] implore you to avoid a precipitous sale of the nation’s Bitcoin holdings.” She believes that Bitcoin (BTC) could aid in diversifying Germany’s treasury holdings, act as a defense against inflation and currency depreciation, and foster innovation within the nation.
Cotar argues that continuing to sell off Bitcoin is not judicious and actually undermines the country’s interests. She took the opportunity to extend an invitation to four German officials to attend the “Bitcoin Strategies for Nation States” conference in October, with the hope of influencing their perspective on cryptocurrency.
According to data from the cryptocurrency analytics firm Arkham, the German government has parted with 7,583 Bitcoins—valued at approximately $434.9 million at present market rates—since June 19. The most recent divestment involved moving $172 million in Bitcoin to the exchanges Coinbase, Kraken, and Bitstamp on July 4. Presently, Germany’s Bitcoin reserves stand at 42,274 units, collectively worth $2.4 billion.
Cotar is adamant that this widespread disposal of Bitcoin should cease immediately. She emphasizes that Bitcoin has the potential to fortify Germany’s financial autonomy and bolster its defense against international economic fluctuations.
In the original and translated versions of Cotar’s letter to the German government, she states, “Rather than divesting, I propose formulating an all-encompassing Bitcoin strategy. This could encompass retaining Bitcoin within the state’s coffers, issuing Bitcoin-denominated bonds, or fostering a regulatory climate conducive to Bitcoin.”
A key component of this proposed Bitcoin strategy would be the creation of legal structures to encourage Bitcoin-centric innovation and to attract leading global talent.
In related news, despite the recent downturn in Bitcoin’s value—with current trading figures at $57,810, marking a 6% decrease over the past week and an 18% drop over the past month—social media platforms have seen a surge in ‘buy the dip’ mentions.
The German government has yet to confirm its plans regarding the remaining Bitcoin assets. However, Tron founder Justin Sun has expressed interest in purchasing Germany’s $2.3 billion worth of Bitcoin to mitigate market impact.
The ongoing Bitcoin sell-off by Germany, coupled with the Mt. Gox’s $9 billion compensation scheme for creditors, is believed to have contributed to the recent decline in Bitcoin prices.
Magazine discussion point: Could an impending financial crisis bring an end to the cryptocurrency bull market?