Taiwan is considering a significant policy shift—one that could lead to Bitcoin being included in its national reserves.
Faced with inflationary pressures, global trade tensions, and growing reliance on U.S. Treasury securities, the country is reassessing whether its financial reserves are sufficiently secure.
Lawmaker Ko Yu-Chun recently proposed including Bitcoin in the central bank’s reserve mix, citing its decentralized nature and fixed supply as a strategic hedge against potential future financial instability.
The proposal reflects a broader reevaluation of traditional reserve assets, especially since more than 90% of Taiwan’s US$577 billion in foreign exchange reserves are currently tied to U.S. Treasuries, raising concerns about diversification and liquidity during crises.
Rising currency risks and dependence on U.S. Treasuries
Taiwan’s export-driven economy is particularly sensitive to geopolitical shifts and inflationary trends.
With increasing tensions between the U.S. and China and the risk of supply-chain disruptions, lawmakers are growing wary of the vulnerability of the New Taiwan Dollar (NTD).
Taiwan currently holds 423 metric tons of gold and keeps the vast majority of its foreign assets denominated in U.S. dollars.
Analysts note that although Treasuries have historically been reliable, such concentration exposes the country to U.S. monetary policy and potential sanctions if relations deteriorate.
In a parliamentary speech, Ko Yu-Chun emphasized that Taiwan needs “strategic flexibility” in managing its reserves, particularly in scenarios involving financial decoupling or restricted access to dollar markets.
Bitcoin proposed as a hedge, not a replacement
The core of the proposal is not to overturn Taiwan’s current reserve strategy, but to diversify it.
Ko’s plan calls for allocating a small percentage of Taiwan’s reserves to Bitcoin, arguing that it would add an uncorrelated asset that is globally accessible and not subject to arbitrary inflation.
Bitcoin’s capped supply of 21 million coins, combined with its decentralized ledger system, is a primary reason it is being considered.
Professor Liu Yiru of National Taiwan University has said these attributes make Bitcoin particularly resilient to inflationary dilution—unlike fiat currencies, which central banks can expand in response to economic shocks.
Former Premier Chen Tsung also noted that while Bitcoin may not serve widely as a transactional currency, its role as a digital store of value could help protect Taiwan’s financial sovereignty.
Global dynamics of Bitcoin reserves
Taiwan’s deliberations come at a time when other governments are experimenting with Bitcoin at the state level.
In the U.S., New Hampshire recently passed legislation allowing Bitcoin to be included in state reserves.
That move has sparked discussions in other U.S. states and in emerging markets facing high inflation or currency instability.
While Taiwan has not formalized any such policy, the debate signals a change in how policymakers view cryptoassets—not only as speculative investments, but as potential components of national financial infrastructure.
Beyond legislative interest, Ko proposed establishing a working group to study the feasibility, volatility, and custody risks associated with holding Bitcoin as part of official reserves.
The central bank has not publicly commented on the proposal, though further discussion is expected during upcoming budget and monetary policy reviews.
These discussions also reflect Taiwan’s need to balance a robust technology sector with risks stemming from its geopolitical position.
Diversifying reserve assets could serve both economic objectives and broader strategic autonomy.