Luxembourg's Intergenerational Sovereign Wealth Fund (FSIL) has become the first state-level fund in the Eurozone to invest in Bitcoin, allocating 1% of its holdings to Bitcoin exchange-traded funds (ETFs). The decision was announced on October 8, 2025, by Bob Kieffer, Luxembourg's Director of the Treasury, during the presentation of the 2026 Budget at the Chambre des Députés, following an earlier revelation by Finance Minister Gilles Roth.
Under the revised investment framework approved in July 2025, FSIL is now authorized to allocate up to 15% of its assets to alternative investments, including crypto assets, private equity, and real estate. With total assets under management of approximately €764 million (about $888 million) as of June 30, the 1% allocation translates to roughly $9 million invested in Bitcoin ETFs, managed through regulated instruments to minimize operational risks rather than direct holdings.
Kieffer addressed mixed reactions to the move, noting that some critics argue it's "too little too late," while others highlight Bitcoin's volatility and speculative nature. However, he emphasized that the FSIL management board views the allocation as a "sensible balance between innovation and stability," reflecting confidence in Bitcoin's long-term potential while adhering to the fund's conservative approach.
This announcement contrasts with Luxembourg's traditionally cautious stance, as the country's 2025 National Risk Assessment had previously classified crypto-related businesses as high-risk for money laundering. Despite this, Luxembourg has attracted major crypto players, including Bitstamp, which secured a Crypto Asset Service Provider (CASP) license under the EU's MiCA framework in May, and Standard Chartered and Coinbase, which have expanded their European presence through Luxembourg-based regulatory hubs.
Globally, nation-states and government entities collectively hold about 515,885 Bitcoin, valued at roughly $63 billion, representing around 2.46% of Bitcoin's total supply. The United States leads with 198,021 BTC, followed by China with 190,000 BTC, while El Salvador remains the only country to have adopted Bitcoin as legal tender, holding 6,344 BTC. This move by Luxembourg could signal a broader trend of sovereign funds treating Bitcoin as a strategic reserve asset, potentially accelerating institutional adoption in Europe.