Bitcoin as National Reserves – 2025 Second Innovation and Derivatives Supervision Strategy Forum
Since the Trump administration came to power, the possibility of Bitcoin becoming a national reserve asset has sparked global discussions. In response to this international trend, the Bitcoin and Virtual Currency Development Association held the “Bitcoin as National Reserves – 2025 Second Innovation and Derivatives Supervision Strategy Forum” today (13th). Former Premier Chen Chun, former Minister of Finance Liu Yih-ru, Legislative Yuan Member Dr. Ko Ru-chun, along with representatives from government agencies and industry experts, were invited to discuss related issues.
The Director-General of the Financial Supervisory Commission’s Securities and Futures Bureau, Zhang Zhenshan, opened the forum by stating that the cryptocurrency industry is rapidly developing worldwide, bringing numerous opportunities. However, along with the innovation, there are significant risks, especially issues related to cryptocurrency fraud. Zhang Zhenshan believes that addressing these issues properly is crucial for the long-term development of the industry.
Currently, the Financial Supervisory Commission (FSC) is regulating Taiwan’s cryptocurrency industry with a “four-stage” approach. The FSC has already launched the “Virtual Asset Platforms and Trading Business Anti-Money Laundering and Counter-Terrorist Financing Regulations” and is preparing to implement specific laws as it moves toward the fourth stage of regulation.
Zhang Zhenshan emphasized that he is optimistic about the future development of Taiwan’s virtual asset industry. He also hopes to collaborate with industry players, blockchain technology experts, and others to promote the stable development of the industry.
Are Fiat Money and Stablecoins Incompatible?
Professor Liu Yih-ru from the Department of Finance at National Taiwan University shared her views on the development of cryptocurrencies at the forum and recalled her early experiences with Bitcoin. She likened traditional finance and cryptocurrency to two parallel worlds, using the plot of the Korean drama “W – Two Worlds” as an example. She believes that while the two worlds initially had little understanding of each other, they will gradually converge.
Liu Yih-ru recalled that when she first held a cryptocurrency forum in 2017, many people found the concept unfamiliar and confusing. However, she firmly believed that cryptocurrencies have great potential, inspired by economist Hayek’s idea of the denationalization of money.
In his book “The Denationalization of Money,” Hayek argues that money should not be issued or controlled by the government or central banks but should be allowed to be issued by private entities (such as banks) as competing currencies.
Bitcoin, with its decentralized nature, rose in response to factors such as the global financial crisis and government policies. Since its inception, Bitcoin has gone from being unrecognized to the point where the United States has officially launched a cryptocurrency spot ETF, allowing retail investors to enter the cryptocurrency market. Liu Yih-ru believes that the development of cryptocurrency is an irreversible trend. It is gradually being accepted by mainstream financial systems and is having a profound impact on the global financial landscape.
Furthermore, Liu Yih-ru believes that the rise of stablecoins, particularly those pegged to the U.S. dollar, is actually a way for the United States to expand the influence of the dollar.
Liu Yih-ru pointed out that many people believe cryptocurrencies are unsuitable for inclusion in national strategic reserves due to Bitcoin’s significant price volatility. However, the situation is slightly different for the United States. There are currently 203 stablecoins in the U.S. market, with 93% of them pegged to the U.S. dollar, which makes Bitcoin’s price fluctuations have a relatively minor impact on the overall financial system.
In fact, as demand for Bitcoin increases, the demand for stablecoins also rises, further boosting the demand for U.S. dollars and U.S. Treasury bonds, thereby reinforcing the dollar’s global position. Therefore, incorporating Bitcoin into U.S. strategic reserves may be a strategy to indirectly promote the development of stablecoins and strengthen the dollar’s influence. This could be one of Trump’s calculations.
Is Bitcoin a Currency or an Asset? Should Bitcoin Be Included in Foreign Exchange Reserves?
Bitcoin Should Not Be Included in Foreign Exchange Reserves
Should Bitcoin be suitable for inclusion in foreign exchange reserves? Regarding this question, former Vice Governor of the Central Bank Xu Jiadong directly stated, “Bitcoin is not money, and the central bank will not consider this matter (as foreign exchange reserves) in the future.” Xu Jiadong pointed out that foreign exchange reserves are crucial for a country’s economic stability, but managing them effectively in the face of globalization and changes in the financial environment presents significant challenges.
Foreign exchange reserves management is not only influenced by external market risks but also faces challenges from internal policies and political environments. Especially during international financial crises, strong foreign exchange reserves can help stabilize the country’s economy.
The functions of foreign exchange reserves include regulating foreign exchange needs, stabilizing exchange rates, responding to emergencies, earning income (referring to the benefits derived from “objects” and “rights” in civil law), and other economic and non-economic functions, such as establishing sovereign wealth funds or promoting diplomatic ties.
Xu Jiadong mentioned that traditional foreign exchange reserve management methods no longer suit the current international market and that innovative strategies, such as sovereign financial funds, should be explored to improve asset operation efficiency. However, despite the rise of digital currencies and other emerging tools, their high volatility makes them unsuitable as a substitute for foreign exchange reserves.
Bitcoin Should Be Included in Foreign Exchange Reserves
Li Guanshi, a senior consultant at the China External Trade Development Association, presented a different view. Li Guanshi pointed out that the trade structure challenges the United States faces are not only related to international trade flows but also to the future fate of the U.S. dollar as the global reserve currency.
Although Trump was initially seen as a “madman” type of political figure, his cabinet team had a clear plan for America’s economic strategy. Li Guanshi emphasized that Trump’s economic policy goes beyond trade tariffs and monetary policy. The deeper logic behind it is to change the international trade structure and reshape the U.S.’s position in the global economy.
Li Guanshi emphasized that if the U.S. wants to maintain its leadership in the global economy, it must reset the international trade structure. Although the relationship between the U.S. dollar and U.S. Treasury bonds remains crucial, as the U.S. is no longer the world’s largest producer, relying on the dollar as the foundation of global trade will face increasing pressure.
Li Guanshi noted that this is not just a monetary policy issue but also about how the U.S. can revitalize its industries, improve domestic wealth disparities, and address rising trade deficits and international competition pressures.
With the rise of digital currencies (such as Central Bank Digital Currencies – CBDC) and stablecoins, the traditional reserve currency structure is facing unprecedented challenges. Combined with China’s digital currency strategy and the role of Bitcoin and gold in international reserves, these factors may have disruptive impacts on the global trade structure.
Li Guanshi emphasized that this competition for forms of money and financial sovereignty is not just a battle between the U.S. and China; it is a key moment for the reshaping of the global financial order.
The Chairman of the Bitcoin and Virtual Currency Development Association, Lin Hongyu, also believes that the U.S. including Bitcoin in its strategic reserves represents global recognition of cryptocurrency by the largest economy.
Lin Hongyu suggested that Taiwan should actively think about strategies such as enacting specific laws, including Bitcoin in foreign exchange reserves, or investing through sovereign funds, rather than just debating its asset classification.