Taiwan Legislator Proposes 5% Bitcoin Allocation to National Reserves

Taiwanese legislator Ko Ju-Chun has proposed a significant shift in the region's financial strategy by urging the government to include Bitcoin in its national reserves, alongside traditional assets such as gold and foreign currencies. This proposal comes as lawmakers in the region are increasingly concerned about potential currency crises and the need for hedging against inflation and global risks. Ko Ju-Chun believes that adding Bitcoin to the national asset reserves could serve as an effective hedge against uncertainty and economic volatility.

Speaking at a national finance conference on May 9, Ko suggested allocating a small portion of the country’s reserve assets to Bitcoin as a hedge against rising global economic uncertainty and regional geopolitical risks. He pointed to Bitcoin’s decentralized nature, fixed supply, and growing role as a hedge in various countries as reasons to integrate it into Taiwan’s sovereign asset strategy. He highlighted Taiwan’s reliance on exports and the associated volatility in the New Taiwan dollar as further justification for broadening the reserve mix.

Ko also referenced the country’s vulnerability in a potential crisis scenario, suggesting that Bitcoin could serve as an uncorrelated asset that maintains liquidity and avoids seizure risk during geopolitical tensions. He previously indicated on X that Taiwan could allocate up to 5% of its reserves—about $50 billion—to Bitcoin, though he framed this as part of a diversified approach rather than a full pivot. While Ko acknowledged Bitcoin is not a singular solution to Taiwan’s financial challenges, he emphasized the need to expand the nation’s toolkit for economic resilience.

The proposal arrives as Taiwan moves toward more crypto-friendly regulation. The Financial Supervisory Commission is expected to roll out institutional crypto custody trials later this year. In contrast, mainland China continues to enforce a blanket ban on most crypto-related activities. Taiwan’s Financial Supervisory Commission released a draft of the “Virtual Asset Service Act” on March 25 to regulate crypto businesses and protect investors. The draft included licensing requirements for VASPs, standards for stablecoin issuance by banks, and enforcement measures. A 60-day public consultation period was launched, with the law expected to be submitted to the Executive Yuan by June 30.

Ko’s call positions Taiwan among a small but growing group of jurisdictions exploring Bitcoin as a strategic reserve asset. Though no formal policy has been introduced, his advocacy signals rising interest in digital assets within Taiwan’s financial planning discussions. The legislator has specifically proposed creating a $600 million Bitcoin reserve. This move is aimed at strengthening national security and economic resilience. By diversifying the national reserves to include Bitcoin, the region could potentially benefit from the cryptocurrency's decentralized nature and its status as a global digital asset. This proposal reflects a growing recognition of the potential role that digital currencies can play in modern financial strategies.

The call to include Bitcoin in national reserves is part of a broader trend where lawmakers are advocating for the region to embrace cryptocurrencies to avoid being left behind in the rapidly evolving financial landscape. The proposal underscores the belief that digital assets like Bitcoin can offer unique advantages in terms of security, transparency, and global acceptance. However, it is important to note that while Bitcoin is seen as a portfolio diversifier, analysts warn that it is not yet ready to replace traditional assets like gold or bonds as a reliable hedge. The inconsistent correlation of Bitcoin to stocks and its continued volatility are factors that need to be considered.

The proposal by Ko Ju-Chun highlights the ongoing debate about the role of cryptocurrencies in national financial strategies. While some see Bitcoin as a strategic reserve asset, others remain cautious about its volatility and regulatory challenges. The region's government will need to carefully evaluate the potential benefits and risks of including Bitcoin in its national reserves before making any decisions. This proposal is a significant step in the region's exploration of digital currencies and their potential role in strengthening national financial security.