A pro-Bitcoin member of the German Bundestag, Joana Cotar, has publicly criticized the government's decision to sell off its substantial BTC holdings.

Cotar's stance comes in the wake of hundreds of millions worth of Bitcoin being transferred from government wallets to exchanges and trading desks, signaling the commencement of a large-scale liquidation process.

Already today, the German Government has transferred 547.44 BTC, worth approximately $30.09 million, to market maker Flow Traders, according to blockchain intelligence firm Arkham. This transfer represents just a fraction of the government's 41,000 BTC holdings, currently valued at $2.27 billion.

The Bitcoin liquidations have been short-sighted, according to Cotar.

"Instead of holding #Bitcoin as a strategic reserve currency, as is already being debated in the USA, our government is selling on a large scale." she wrote on Twitter.

Cotar, an independent who was a member of the Alternative for Germany party until 2022, has served in the Budestag since 2017. This isn't the first time she's advocated on behalf of Bitcoin. She's worn a BTC t-shirt while addressing Parliament and made supporting Bitcoin part of her political platform.

In her letter, Cotar emphasized the potential missed opportunity for Germany to position itself at the forefront of financial innovation and economic sovereignty.

The letter, which has been translated, was addressed to key government officials, including Minister President of Saxony Michael Kretschmer, Federal Minister of Finance Christian Lindner, and Chancellor Olaf Scholz, Cotar argued for retaining and strategically leveraging the seized BTC.

"Bitcoin offers a unique opportunity to diversify the state's assets," Cotar wrote, highlighting the potential to reduce risks associated with traditional asset classes.

She further argued for BTC's role in long-term value preservation, saying its scarcity and deflationary nature could serve as protection against inflation.

"A clear legal framework arising from the state's self-interest in Bitcoin technology would promote local innovation and entrepreneurship, contributing to positive technological and financial development in Germany," Cotar said.

She also argued that holding the Bitcoin—and embracing the underlying blockchain technology—would help the country attract top talent and foster progress in its financial and tech sectors.

Instead of selling, Cotar proposed developing a comprehensive Bitcoin strategy: "This could include retaining Bitcoin in the state treasury, issuing Bitcoin bonds, or creating a favorable regulatory environment," she wrote.

Edited by Stacy Elliott.