Tag: exposure

• Lawmaker Ko Ju-Chun suggests adding Bitcoin to national reserves.
• Taiwan has 423 metric tons of gold in its asset base.
• New Hampshire in the US passed a law to include Bitcoin in state reserves.

Taiwan is considering a significant policy shift—one that could see Bitcoin join its national reserves.

Faced with inflationary pressure, global trade tension, and increasing reliance on US Treasury bonds, the country is now questioning whether its financial buffers are truly secure.

Legislator Ko Ju-Chun recently proposed the inclusion of Bitcoin in the central bank’s reserve mix, citing its decentralised nature and fixed supply as a strategic hedge against future financial instability.

The proposal reflects a broader reassessment of traditional reserve assets, especially as over 90% of Taiwan’s US$577 billion in foreign exchange reserves are currently tied to US Treasuries, raising concerns about diversification and liquidity during crises.

Rising currency risks and dependency on US Treasuries

Taiwan’s export-led economy is particularly sensitive to geopolitical shifts and inflation trends.

With growing tensions between the US and China and the risk of supply chain disruptions, lawmakers are increasingly alert to the vulnerabilities of the New Taiwan Dollar (NTD).

Currently, Taiwan holds 423 metric tons of gold and nearly all its foreign exchange in US dollar-denominated assets.

Analysts note that while these have been historically reliable, their over-concentration exposes the country to US monetary policy and potential sanctions should relations deteriorate.

In an address to parliament, Ko Ju-Chun highlighted that Taiwan needs “strategic flexibility” in how it manages its reserves, especially under scenarios of financial decoupling or restricted access to dollar markets.

Bitcoin floated as a hedge, not a replacement

The core of the proposal is not to upend Taiwan’s current reserve strategy but to diversify it.

Ko’s plan calls for allocating a small percentage of Taiwan’s reserves to Bitcoin, which he argues would provide an uncorrelated asset that is globally accessible and cannot be arbitrarily inflated.

Bitcoin’s fixed supply of 21 million tokens, combined with its decentralised ledger system, is a key reason why it is being considered.

According to Professor Liu Yiru of National Taiwan University, these features make it particularly resistant to inflationary dilution—unlike fiat currencies, which central banks can expand during economic shocks.

Former Premier Chen Cong also weighed in, stating that although Bitcoin may not serve as a transactional currency at scale, its role as a digital store of value could help safeguard Taiwan’s financial sovereignty.

Global momentum for Bitcoin reserves

Taiwan’s deliberation comes at a time when other governments are also experimenting with Bitcoin at the state level.

In the US, New Hampshire recently passed the Bitcoin Reserve Act, allowing the inclusion of the digital asset in its state reserves.

The move has prompted discussions in other American states and emerging markets facing high inflation or currency instability.

While Taiwan has yet to formalise any such measure, the conversation signals a shift in how policymakers view crypto-assets, not merely as speculative investments but as potential components of national financial infrastructure.

In addition to legislative interest, Ko suggested that a task force be set up to study the feasibility, volatility, and custodial risks associated with Bitcoin reserves.

The central bank has not publicly responded to the proposal, though it is expected to be discussed further in upcoming budget and monetary policy reviews.

The broader context of these debates also includes Taiwan’s need to balance its strong technological sector with the risks posed by its geopolitical location.

Diversifying reserve assets may serve not only economic goals but also broader strategic autonomy.