Taiwan Considers Bitcoin for National Reserves
Taiwan’s Premier Office and Central Bank plan to study Bitcoin’s role in strategic reserves. They agreed on a three-stage approach, including research, drafting regulations, and a pilot program using seized Bitcoin.
Dr. Ju-chun Ko, a key legislator, emphasized Bitcoin will not replace current reserves. Instead, it may help diversify Taiwan’s assets. Taiwan now holds $577 billion in reserves, mainly U.S. Treasury bonds and gold. The government sees Bitcoin as a potential tool to manage financial risks.
Current Reserve Strategy and Bitcoin Pilot
Taiwan’s reserves are mostly in U.S. Treasury bonds (92%) and 423 metric tonnes of gold. The New Taiwan Dollar has shown volatility, with daily shifts up to 5%. This has increased interest in using Bitcoin to reduce risks and inflation exposure.
The Central Bank’s plan includes detailed studies before adopting any policy changes. The pilot project will begin with Bitcoin seized by authorities, currently awaiting auction. The government’s position remains cautious but open to innovation in reserve management.
Global Trends in Bitcoin Reserves
- El Salvador adopted Bitcoin as legal tender in 2021 and holds over 6,000 BTC.
- Other countries like the US, China, UK, and Bhutan have explored or hold Bitcoin in reserves.
- Indonesia is also considering Bitcoin for its national reserves and financial stability.
- However, some central banks, like South Korea’s and the European Central Bank, reject Bitcoin due to volatility and liquidity concerns.
Taiwan’s move aligns with a growing global trend but remains cautious amid varying central bank views. The government is focused on thorough research and pilot testing before making any decisions.
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