Luxembourg’s Intergenerational Sovereign Wealth Fund (FSIL) is set to allocate 1% of its €700 million portfolio to bitcoin and other digital assets via regulated exchange-traded funds, according to Finance Minister Gilles Roth.

This €7 million investment marks the first direct sovereign wealth exposure to bitcoin ETFs within the Eurozone.

Policy shift enables bitcoin allocation

The decision follows a July 2025 policy revision, which permits up to 15% of FSIL’s assets to be placed in “alternative investments,” including digital assets.

Treasury Director Bob Kieffer described the move as an experiment, stating:

“The 1% allocation is a balanced experiment reflecting Bitcoin’s long-term potential.”

FSIL’s portfolio was previously concentrated in bonds and index funds, with its total assets valued around $887 million as of mid-2025.

Indirect exposure via ETFs

Rather than holding bitcoin directly, FSIL will gain exposure through regulated bitcoin ETFs to minimize custody and operational risks.

This approach is consistent with broader risk management practices among institutional investors.

Luxembourg’s fintech ambitions

The allocation aligns with Luxembourg’s efforts to establish itself as a hub for digital finance under the EU’s Markets in Crypto-Assets (MiCA) regulation.

The country has attracted numerous firms seeking MiCA licenses, reflecting its ambition to lead in Europe’s digital asset sector.

Growing global trend

Luxembourg joins other governments cautiously exploring bitcoin exposure. Norway’s $1.9 trillion sovereign wealth fund maintains indirect bitcoin exposure via equities, while the Czech Republic and Finland have signaled similar interests.