Taiwan lawmaker Dr. Ko Ju-Chun formally proposed that the island allocate a portion of its $600 billion foreign exchange reserves into Bitcoin as a geopolitical hedge, directly presenting the case to Premier Cho Jung-tai and central bank Governor Yang Chin-long. The proposal, backed by the Bitcoin Policy Institute, frames Bitcoin not as a speculative bet but as insurance against asset restrictions in extreme geopolitical scenarios. The central bank has been given a one-month deadline to deliver a report on stablecoins and digital asset reserves.
Taiwan’s Dollar Concentration Fuels Reserve Diversification Debate
Taiwan’s foreign exchange reserves exceed $600 billion, with over 80% held in US dollar assets. This heavy concentration creates structural vulnerability if geopolitical tensions restrict access to dollar-denominated holdings. The Bitcoin Policy Institute argues that Bitcoin offers an asymmetric hedge: it remains accessible even when traditional financial channels face blockade or freezing. Jacob Langenkamp, a BPI researcher, stated that “Bitcoin could stay within reach even in extreme situations where conventional financial assets might be blocked or restricted.” The proposal reframes Bitcoin allocation not as yield-seeking behavior but as catastrophic risk mitigation for a strategically isolated economy.
Central Bank Reversal Signals Possible Policy Shift
Taiwan’s central bank rejected Bitcoin as a reserve asset in 2025, citing “concerns over price swings, liquidity, and the practical challenges of custody.” Yet the same institution is now running a sandbox program testing digital assets using seized Bitcoin. This contradiction raises questions about whether the central bank’s position is hardening or softening. Bitcoin traded at $78,412 on the 24-hour chart at proposal time, reflecting the volatility concerns cited by regulators. The one-month reporting deadline suggests the central bank will either clarify its stance or reveal findings from its experimental program. Sam Lyman, BPI spokesperson, and the institute’s research team appear confident that data from the sandbox will support a reserve allocation case.
Geopolitical Risk and Macro Trend Alignment
Taiwan’s proposal aligns with a broader global trend of central banks diversifying away from dollar-heavy reserves. Countries including El Salvador, Singapore, and others have explored or adopted Bitcoin holdings for similar reasons. The proposal also reflects growing recognition that geopolitical isolation—not just inflation or currency devaluation—can impair reserve asset liquidity. Bitcoin’s decentralized nature and non-custodial transferability offer properties that traditional assets cannot match in scenarios of financial sanctions or asset freezes. Taiwan’s case is particularly acute given its geopolitical position and the concentration of dollar reserves, making the diversification argument harder for policymakers to dismiss entirely.
Next Steps: Central Bank Report and Political Will
The formal presentation to Premier Cho Jung-tai and Governor Yang Chin-long marks the proposal’s entry into official policy channels rather than public debate. The one-month deadline for the central bank’s report on digital assets will be the critical juncture. No official statement from the central bank or Premier’s office has confirmed reception of the proposal or acceptance of the timeline. The central bank’s sandbox findings and the formal report will determine whether Taiwan becomes the first major economy to formally allocate national reserves to Bitcoin, or whether custody and volatility concerns remain binding constraints.
