As Bitcoin ($BTC) continues to be adopted in many countries, but a US organization proposed Bitcoin to Taiwan, which faces competition from China.
BPI said Taiwan should also adopt it. $BTC as a reserve asset in case of a potential conflict with China.
The Bitcoin Policy Institute (BPI) said in a recent report that Taiwan should consider adopting Bitcoin as a reserve asset in case of 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 pointed out that while gold can be confiscated or rendered unusable, and dollar assets can be restricted, Bitcoin requires no physical transportation and provides complete access.
“Bitcoin may be the only fully accessible reserve asset in the face of Chinese military pressure.”
If China were to blockade or invade the country, physical transport of gold would be difficult and access to dollar assets could be restricted, but Bitcoin would remain accessible without physical movement. ”
The report notes that at least 80% of Taiwan’s central bank reserves are held in US dollar assets, making high dependence on the dollar a risk. He stressed that reserves could face a negative impact if the dollar weakens due to rising U.S. debt or a downturn in the AI market.
BPI suggested that Bitcoin could be a hedge against this war risk. He also pointed out that Taiwan could benefit from future price increases if it adopts Bitcoin before other countries.
Taiwan’s central bank considered creating a Bitcoin reserve last year but scrapped the plan, citing volatility, liquidity and custody issues.
Addressing this issue in his report, Langenkamp argued that central banks’ concerns are valid, but that issues of storage, liquidity and volatility can be resolved in an institutional manner.
Taiwan currently has 210 people. $BTCItems seized during a criminal investigation.
*This is not investment advice.
