Facing the continuous escalation of global geopolitical tensions, Legislator Ge Rujun today warned about Taiwan's financial stability during a national forum at the Legislative Yuan. He pointed out that Taiwan, as an export-dependent economy, has experienced increased New Taiwan dollar exchange rate volatility, bringing challenges to the overall economy. Ge Rujun urged the government to address this issue and actively evaluate incorporating new assets like Bitcoin into national reserves to enhance financial resilience.
Taiwan currently possesses approximately 423 metric tons of gold reserves and over $577 billion in foreign exchange reserves, demonstrating substantial strength. However, Ge Rujun noted that over 90% is invested in US Treasury bonds, which may face challenges in asset safety and liquidity during extreme market fluctuations or regional conflicts.
"Eggs should not be placed in the same basket," Ge Rujun believes that facing potential risks in traditional asset allocation, Taiwan should consider introducing new financial instruments like Bitcoin. He explained that Bitcoin, verified by the market for over a decade, has fixed total supply, decentralization, and censorship resistance, earning it the title of "digital gold". A 2023 SSRN report showed that during significant financial market fluctuations, Bitcoin's price correlation with gold reached 0.6, indicating its hedging attributes.
Ge Rujun also cited international examples, noting that some US state governments are exploring Bitcoin's potential as a reserve asset. New Hampshire recently passed a law allowing partial public funds investment in Bitcoin, with approximately 28 states discussing similar diversified reserve bills. Arizona's House of Representatives has already passed related legislation, demonstrating this trend's gradual expansion.
In fact, domestic discussions about Bitcoin as a reserve asset are not new. During the "Bitcoin National Reserve Forum" in March, former Premier Chen Chung publicly stated: "Bitcoin is not currency, but an inflation-resistant asset." National Taiwan University's Honorary Professor Liu Yiru also pointed out that compared to unlimited quantitative easing policies in Europe and the US, Bitcoin's fixed issuance limit provides stronger inflation resistance. Fidelity's research shows Bitcoin's price volatility is decreasing over time, solidifying its value storage role. TAITRA Chairman Huang Zhifang previously mentioned that Bitcoin's decentralized nature offers Taiwan, geopolitically sensitive, a potential option to mitigate single currency system risks.
Ge Rujun emphasized that he is not advocating Bitcoin as the sole solution, but suggesting the government view it as one tool for diverse asset allocation, with a small proportion. He believes this could enhance Taiwan's sovereign asset allocation flexibility and risk hedging capabilities, further strengthening the overall financial system's resilience and adaptability.
"Financial strategies in the digital age must evolve with the times," Ge Rujun quoted former Premier Chen Chung, describing Bitcoin as "potentially the gold, silver, or even gunpowder of the digital age, and intelligent nations won't let weapons fall into others' hands." He urged the government to actively consider constructing a more diverse reserve asset framework, preparing for future uncertain challenges, with "diverse reserves, resilient Taiwan" as the solid foundation for national development.
