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Taiwanese legislator Ko Ju-Chun has proposed that the government consider incorporating Bitcoin into its national reserves alongside traditional assets like gold and foreign currencies. Speaking at a national finance conference on May 9, Ko suggested allocating a small portion of Taiwan’s reserve assets to Bitcoin as a hedge against growing global economic uncertainties and regional geopolitical risks.

Why Bitcoin in National Reserves?

Ko emphasized Bitcoin’s decentralized nature, fixed supply, and increasing recognition as a hedge in various countries as key reasons for integrating it into Taiwan’s sovereign asset strategy. He also highlighted Taiwan’s heavy dependence on exports, which often leads to fluctuations in the New Taiwan dollar, as further justification for diversifying the nation’s reserve portfolio.

“Bitcoin’s unique attributes, such as its limited supply and independence from traditional financial systems, make it a compelling addition to our reserves,” Ko stated.

Bitcoin as a Crisis-Resilient Asset

Ko pointed out that Bitcoin could serve as an uncorrelated, liquid asset during times of geopolitical tension or economic crisis. Unlike traditional assets, Bitcoin is less susceptible to seizure risks, offering a layer of security for Taiwan’s reserves in uncertain scenarios.

Previously, Ko suggested Taiwan could allocate up to 5% of its reserves—approximately $50 billion—to Bitcoin. However, he framed this as part of a diversified approach, emphasizing that Bitcoin should complement, not replace, traditional reserve assets. He also noted that Bitcoin alone would not solve Taiwan’s economic challenges but could enhance the nation’s financial resilience.

Regulatory Developments in Taiwan’s Crypto Landscape

Ko’s proposal aligns with Taiwan’s broader efforts to establish a more crypto-friendly regulatory framework. The Financial Supervisory Commission (FSC) plans to introduce institutional crypto custody trials later this year, signaling a shift toward embracing digital assets. This approach stands in stark contrast to mainland China, where strict bans on cryptocurrency activities remain in place.

On March 25, the FSC released a draft of the “Virtual Asset Service Act,” aimed at regulating crypto businesses and safeguarding investors. Key provisions in the draft include:

  • Licensing requirements for Virtual Asset Service Providers (VASPs).
  • Standards for stablecoin issuance, particularly by banks.
  • Enforcement measures to ensure compliance with the new regulations.

The draft law is currently undergoing a 60-day public consultation period and is expected to be submitted to the Executive Yuan by June 30.

Positioning Taiwan in the Global Crypto Space

Ko’s advocacy for Bitcoin as a reserve asset positions Taiwan among a growing number of jurisdictions exploring the integration of digital assets into their financial strategies. While no formal policies have been enacted yet, his proposal reflects a rising interest in leveraging Bitcoin’s potential within national financial planning discussions.

As Taiwan continues to refine its regulatory approach and explore innovative financial strategies, the inclusion of Bitcoin in its reserves could mark a significant step toward modernizing its economic framework in an increasingly digital world.

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