Taiwan should explore Bitcoin reserves amid geopolitical risks, according to a think tank analysis.
A research fellow at the Bitcoin Policy Institute, Jacob Langenkamp, recommended in a report that Taiwan reconsider adopting Bitcoin as a reserve asset to hedge against global turmoil and the threat of war with China.
Langenkamp argued that in the event of a Chinese blockade or invasion, Bitcoin would remain fully accessible and spendable, unlike gold or U.S. dollar reserves which could be seized or restricted.
Taiwan's Exposure to U.S. Dollar Risks
Taiwan's central bank reserves are predominantly in U.S. dollar-denominated assets, making the country vulnerable to potential U.S. dollar debasement due to factors like growing U.S. debt and Federal Reserve policies.
Langenkamp suggested that Bitcoin, paired with gold, could provide a hedge against such debasement and offer geopolitical insurance for Taiwan.
Last year, Taiwanese lawmaker Ko Ju-Chun disclosed that the Ministry of Justice holds 210 Bitcoins, valued at $14 million, which were confiscated from criminal investigations, positioning Taiwan as a potential holder in national Bitcoin rankings.
Taiwan's central bank previously ruled out a Bitcoin reserve citing concerns over volatility, liquidity, and custody, but it plans to test the technology using existing crypto assets in a digital sandbox.
Langenkamp addressed the central bank's concerns, stating that issues with Bitcoin's liquidity and volatility are valid but could diminish as the asset matures and gains institutional adoption among nations.
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