As Bitcoin (BTC) continues to be adopted by many countries, a US organization has proposed Bitcoin to Taiwan, which is facing competition from China.
BPI said Taiwan should adopt BTC as a reserve asset against a potential conflict with China.
The Bitcoin Policy Institute (BPI) stated in a recent report that Taiwan should consider adopting Bitcoin as a reserve asset to prepare for a potential war with China.
BPI argued that in the event of a Chinese blockade or full-scale invasion of Taiwan, Bitcoin would be the only fully accessible and usable reserve asset.
BPI researcher Jacob Langenkamp noted that gold can be confiscated or rendered unusable, and dollar assets may be limited, whereas Bitcoin requires no physical transport and provides full access.
“In the face of Chinese military pressure, Bitcoin may be the only fully accessible reserve asset.”
If China blocks or invades the country, physically transporting gold will become difficult and access to dollar assets may be restricted, but Bitcoin will still be accessible without physical movement.”
The report stated that at least 80% of Taiwan’s central bank reserves are held in US dollar assets, identifying high reliance on the dollar as a risk. It emphasized that the reserves could face negative consequences if the dollar depreciates due to rising US debt or a decline in the AI market.
BPI suggested that Bitcoin could provide a hedge against this war risk. It also noted that Taiwan could benefit from future price increases if it adopted Bitcoin before other countries.
Taiwan’s central bank considered creating a Bitcoin reserve last year but suspended the plan due to volatility, liquidity, and storage issues.
While addressing this issue in the report, Langenkamp argued that the central bank’s concerns were justified, but that storage, liquidity, and volatility problems could be solved through institutional methods.
Taiwan currently holds 210 BTC, which was seized during criminal investigations.
*This is not investment advice.