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France Proposes National Bitcoin Reserve, Wants to Buy 2% of Bitcoin Supply
A pro-crypto bill will be tabled today in the French Parliament by the center-right Union of the Right and Centre (UDR) party, led by lawmaker Éric Ciotti, marking the first time such a comprehensive legislative proposal on cryptocurrency has been introduced in France.
The initiative calls for a national Bitcoin Strategic Reserve and aims to position the cryptocurrency as a form of “digital gold” to strengthen financial sovereignty.
The proposed legislation would see France aim to acquire up to 2% of Bitcoin’s total supply — roughly 420,000 BTC — over the next seven to eight years, according to journalist Gregory Raymond.
To manage the reserve, the bill envisions the creation of a Public Administrative Establishment (EPA), similar in structure to France’s gold and foreign-currency holdings.
Funding for the Bitcoin reserve would come from multiple sources. Surplus nuclear and hydroelectric energy would power public Bitcoin mining operations, with adapted taxation for miners to encourage domestic participation.
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Back in July, French lawmakers submitted a proposal to convert surplus electricity into economic value through Bitcoin mining. The bill outlined a five-year experimental program allowing energy producers to use excess power — particularly from nuclear and renewable sources — for mining.
The July initiative aimed to tackle France’s recurring issue of energy overproduction, as producers were often forced to sell surplus electricity at a loss due to limited storage. The proposal described this as an “unacceptable economic and energy loss.”
This new bill would also allow France to retain crypto seized during legal proceedings, and a quarter of funds collected via popular savings schemes, such as the Livret A and LDDS, would be allocated to daily Bitcoin purchases — approximately 15 million euros per day, or 55,000 BTC per year.
Pending constitutional approval, citizens could also pay certain taxes in Bitcoin.
The bill also emphasizes the use of euro-denominated stablecoins for everyday payments, recognizing them as a credible alternative to traditional payment networks.
Transactions under €200 would be exempt from taxation and social contributions, and payment of taxes in euro stablecoins would be allowed.
The proposal explicitly opposes a European Central Bank-controlled digital euro, arguing that a centralized CBDC could threaten financial freedoms and personal privacy.
To support industry development, the legislation proposes adapting electricity taxation for mining through a progressive excise duty and flexible tariffs for data centers. It also encourages institutional adoption of Bitcoin and other crypto-assets via Exchange Traded Notes (ETNs) and calls for revisions to European prudential rules, which currently impose high risk-weightings on certain crypto-assets, limiting the use of crypto as collateral for “Lombard” loans.
Despite its ambitious scope, the bill faces steep political hurdles. The UDR holds only 16 of 577 seats in the National Assembly, making adoption unlikely without broader support, per Raymond.
This post France Proposes National Bitcoin Reserve, Wants to Buy 2% of Bitcoin Supply first appeared on Bitcoin Magazine and is written by Micah Zimmerman.
The Federal Reserve’s quantitative tightening (QT) program may soon come to an end. Strategists at JPMorgan and the Bank of America believe that the central bank will stop shrinking its roughly $6.6 trillion balance sheet this month, bringing an end to the Fed quantitative tightening.
According to a recent Bloomberg report, these Wall Street giants have moved up their QT program predictions due to a surge in dollar funding costs. They initially anticipated the move in December or early 2026.
JPMorgan and Bank of America strategists predict that the development will occur this month, effectively ending the $6.6 trillion balance sheet unwind from the Federal Reserve.
The Fed QT program, a large and influential market factor since it began in 2022, allows the Fed’s balance sheet of $6.6 trillion to be reduced without replacing maturing Treasury and mortgage-backed securities to gradually remove excess liquidity from the financial system to fight inflation and achieve economic stability. However, with rising borrowing costs in repo and funding markets, concerns are growing about reserve scarcity in the banking system.
In a client note, Bank of America’s Mark Cabana and Katie Craig wrote, “Money markets at current or higher levels should signal to the Fed that reserves are no longer ‘abundant.’” They urged to “cut the crap before things snap.”
At the same time, JPMorgan strategist Teresa Ho noted that markets have become increasingly frictional, highlighting the Fed’s dwindling reverse repo facility as a key warning sign. “Markets have been operating with much more friction,” noted the strategist. This development has led TD Securities and Wrightson ICAP to revise their expectations for the end of quantitative tightening to October. However, Barclays and Goldman Sachs anticipate a slightly later conclusion to the runoff.
Several other Wall Street analysts, including those from Wrightson ICAP, Evercore ISI, and Jefferies, also predict that the Federal Reserve will conclude its QT program by the end of October.
Notably, the central bank chair, Jerome Powell, indicated that the balance sheet reduction is likely to conclude when reserves reach a level “somewhat above” what’s considered ample, aiming to prevent market disruptions. He added, “We may approach that point in the coming months.” This suggests the bank is nearing the end of the Fed quantitative tightening program.
Another noteworthy event the market is watching closely in the wake of the QT program is whether the Fed will do anything about interest rates at the FOMC meeting later this month, scheduled for October 28-29. Powell and some others have mentioned the possibility of rate cuts at previous meetings.
But it is uncertain if a rate cuts may occur at the FOMC meeting, as the government shutdown has now entered the 23rd day with no signs of resolution. The lack of major data releases, starting with the jobs report among others, is putting the Federal Reserve in a challenging position.
If the Fed stops QT, liquidity would dry up, and we would experience a monetary loosening that would bring forth more investment, lower Treasury yields, and demand risk assets like Bitcoin.
Historically, Bitcoin has performed well during QE periods and poorly during QT periods. For instance, during QE from 2020-2021, Bitcoin moved from $7,000 to $69,000. However, once QT began in 2022, as liquidity was tightening, Bitcoin moved from $47,000 down to $15,000. Now, many analysts believe that if the Fed quantitative tightening were to go away, there is a possibility that fresh inflows into Bitcoin may rise and the price may surge.
According to the long-standing analyst Michaël van de Poppe, Bitcoin has been trapped in a sideways move between $100,000 $120,000 in the last six months, which indicates that it is likely going to create a major break either way. Additionally, he expects the next movements of the currency to come from the FOMC meeting, potential rate cuts in the future, and monetary policy changes.
The expected cessation of the Fed’s quantitative tightening and the possible cuts in rates will be a strong factor for the inflow of liquidity into the financial system, raising the risk appetite that in turn might drive the prices of Bitcoin higher.
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Read More: JPMorgan, BofA Predict Fed Ending $6.6T QT in October and Bitcoin May Win">JPMorgan, BofA Predict Fed Ending $6.6T QT in October and Bitcoin May Win
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