Taiwan Eyes Bitcoin as a Strategic Reserve to Hedge Against U.S. Dollar Instability

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In a bold move that could reshape its monetary strategy, Taiwan’s central bank is reportedly preparing to explore Bitcoin as part of its national reserve holdings, citing growing concerns over the volatility of the U.S. dollar and inflationary pressures.

Currently, around 92% of Taiwan’s $577 billion in foreign reserves are invested in U.S. Treasury bonds, making the nation heavily dependent on the stability of the American economy. With the dollar experiencing fluctuating value amid global uncertainty, this dependence has raised alarms among some Taiwanese lawmakers and economists.

Bitcoin as a Hedge Against Dollar Dependence

One of the leading voices behind this initiative, Lawmaker Ju-chun Ko, has urged the central bank to consider Bitcoin as a hedge within the country’s reserve strategy. According to Ko, integrating a digital asset like Bitcoin could provide Taiwan with stronger financial resilience and diversification against USD risk.

“Bitcoin’s decentralized nature and scarcity make it a valuable long-term store of value,” Ko stated during a parliamentary session. “As global markets evolve, Taiwan must adapt its financial strategy to ensure independence and protection from foreign currency shocks.”

If approved, this move would position Taiwan among the few economies considering Bitcoin as a strategic reserve asset, following similar discussions in countries like El Salvador and Argentina. Analysts suggest that even a small percentage allocation of reserves into Bitcoin could enhance Taiwan’s risk diversification while signaling its openness to digital innovation.

Central Bank to Conduct Controlled Bitcoin Tests

While the central bank has yet to release an official framework, sources indicate that the initial phase will involve testing Bitcoin holdings under a controlled environment. The aim is to evaluate liquidity, volatility, and long-term performance compared to fiat-backed assets.

This trial could pave the way for a gradual integration of Bitcoin into Taiwan’s reserves — a cautious yet strategic approach reflecting both innovation and prudence. Experts believe that such diversification could help the island nation protect its reserves from inflationary shocks and geopolitical financial risks tied to the U.S. dollar.

A Step Toward Digital-Era Financial Sovereignty

Taiwan’s potential embrace of Bitcoin signals a broader shift in global finance. As nations reassess their dependency on the U.S. dollar, Bitcoin’s limited supply and decentralized structure are becoming attractive features for monetary diversification.

For Taiwan, this move could serve not only as a financial safeguard but also as a statement of technological and economic autonomy. By blending traditional monetary policy with modern digital assets, Taiwan is positioning itself at the forefront of a new global reserve paradigm.


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