Taiwanese legislator "Bitcoin should be incorporated as a foreign reserve asset" evaluated as a store of value.

Table of Contents* 1. Discussion on BTC becoming foreign currency reserves in Taiwan

• 2. Reasons for considering Bitcoin for Taiwan's foreign exchange reserves.

• 2.1. Current Status of Taiwan's Foreign Exchange Reserves and Potential Risks
• 2.2. Bitcoin functions as a means of asset protection
• 2.3. Movement towards national stockpiling in the United States
• 2.4. The Rise of Bitcoin Valuation in Taiwan and Internationally
• 2.5. Expectations for the use of Bitcoin as a national asset

• 3. The Feasibility of BTC as Foreign Currency Reserves in Taiwan

Discussion on BTC as a Foreign Currency Reserve in Taiwan

KMT legislator Ke Rujun proposed on May 9, 2025, to incorporate Bitcoin (BTC) as a strategic foreign currency reserve asset for the country.

According to local media, Mr. Ge Ruojun argues that in light of the recent rise in international geopolitical risks and currency fluctuations in financial markets, Bitcoin should be positioned as a strategic reserve asset alongside gold and foreign currency, and that efforts should be made to enhance the stability of the financial system.

The Central Bank of Taiwan denied the inclusion of Bitcoin in its foreign exchange reserves in March this year, stating that "Bitcoin's price volatility is too severe." However, data released later revealed that the price volatility of the New Taiwan Dollar reached about three times that of Bitcoin, indicating that Bitcoin was actually more stable.

This central bank's decision is seen as possibly not fully considering the current state of the market, resulting in a reevaluation of Bitcoin as a safe asset.

In light of these circumstances, Mr. Katsuji Gun and others suggest that "it is necessary to diversify the national reserve assets and consider adding Bitcoin as part of the strategic reserves."

Reasons for Considering Bitcoin as Part of Taiwan's Foreign Currency Reserves

The background of Mr. Katsuura's proposal is the current situation surrounding Taiwan's foreign exchange reserves and the characteristics of Bitcoin.

Current Status and Potential Risks of Taiwan's Foreign Exchange Reserves

Taiwan currently holds about 423 tons of gold reserves and approximately $577 billion (about 84.2 trillion yen) in foreign exchange reserves, with over 90% of that being managed in U.S. Treasury securities.

He pointed out that for Taiwan, an export-led economy, this skewed asset composition poses a risk of undermining asset safety and liquidity during geopolitical conflicts or sudden market changes.

To prepare for the potential risks associated with traditional foreign currency reserve management methods, it is stated that "new financial means should be incorporated as a national strategy."

Bitcoin functions as a means of asset preservation.

The reason Bitcoin is gaining attention lies in its characteristics, such as having a fixed supply, being a decentralized system without a central authority, and being resistant to censorship and seizure by governments and other entities.

Bitcoin has been in operation for over 15 years, and due to these characteristics, it is positioned as a strong candidate for "digital gold."

A study published by the Social Science Research Network (SSRN) in 2023 reported that the correlation coefficient between Bitcoin and gold reached 0.6 during periods of rapid fluctuations in the financial markets, indicating the potential for Bitcoin to function as a safe asset that maintains value during times of financial market turmoil.

Movement towards national stockpiling in the United States

The examples of various countries beginning to incorporate Bitcoin into their foreign exchange reserves support the validity of this proposal.

Mr. Katsuragi and others pointed out that the case where the Trump administration confiscated Bitcoin and indicated a policy to manage it as a national reserve asset "demonstrates that Bitcoin has strategic value."

Furthermore, in various states across the United States, bills are being proposed and passed to add Bitcoin to the assets held by state governments.

Recently, New Hampshire has passed a bill allowing public funds to invest 5% in Bitcoin, and the legalization of BTC reserve bills is spreading across the United States.

The increasing valuation of Bitcoin both domestically in Taiwan and internationally.

In Taiwan, at the "Bitcoin National Reserve Forum" held in March this year, former Premier Chen Chong stated that "Bitcoin is not a currency, but an asset that resists inflation."

Professor Liu Yiru of National Taiwan University also pointed out that in a situation where Europe and the United States are issuing money without limits, "the limited supply of Bitcoin makes it an effective countermeasure against inflation."

A study by major asset management firm Fidelity reports that "the price volatility of Bitcoin is decreasing over time, and its role as a store of value is steadily strengthening."

The chairman of the Taiwan External Trade Development Council, Huang Chih-Fang, also pointed out that "the decentralized nature of Bitcoin provides an option to avoid the risks of a single fiat currency system in regions with geopolitical risks, such as Taiwan."

Expectations for the utilization of Bitcoin as a national asset

As the usefulness of Bitcoin is demonstrated from various perspectives, Mr. Ge Rujun emphasizes that by incorporating Bitcoin, even in small amounts, as one of the national asset portfolios, the flexibility of sovereign finance and the ability to hedge risks can be enhanced.

Rather than solving everything solely with Bitcoin, the idea is to incorporate Bitcoin, often referred to as "digital gold," as a strategic asset to prepare for future risks.

Mr. Katsuragumi stated that "A wise nation does not delegate its national security means to other countries," emphasizing the importance of securing new strategic assets like Bitcoin ahead of other countries.

The Realism of BTC Foreign Currency Reserves in Taiwan

Bitcoin is increasingly being valued as a national strategic asset, rather than just a speculative virtual currency (cryptocurrency).

In Taiwan, prompted by the proposals of figures like Kojiro Gun, the government has begun to seriously consider the introduction of Bitcoin into its foreign currency reserves.

There is a growing view that if the Taiwanese government officially decides to incorporate Bitcoin as a foreign exchange reserve asset in the future, it will inevitably impact other countries.

The positioning of Bitcoin as a national-level asset is expected to enhance the overall social recognition and reliability of cryptocurrencies.

*The price is based on the exchange rate at the time of writing (1 dollar = 145.91 yen)

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Source: Local media "UDN" reports

Written and translated by: BITTIMES Editorial Department

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