What Happened?
Recently, the rapid fluctuations in the exchange rate of the New Taiwan Dollar have triggered panic and impacted enterprises, while also highlighting the inadequacy of the central bank’s policies in addressing exchange rate volatility. Additionally, the “financial resilience” of Taiwan’s financial system under high-pressure situations, such as issues with banking apps, remains to be strengthened. Ge Ru-jun believes that Taiwan’s current foreign exchange reserves are heavily reliant on a single currency, lacking a risk diversification mechanism. It is necessary to evaluate the inclusion of digital assets like Bitcoin into foreign exchange strategic reserves to diversify risks and enhance responsiveness, countering the central bank’s argument against Bitcoin based on its volatility.
International trends, such as discussions and legislations in some U.S. states to incorporate Bitcoin into reserves and South Korea’s plans to open Bitcoin ETFs, emphasize that digital assets have become an important direction in global finance. The Taiwanese government should accelerate the promotion of digital financial transformation (such as blockchain and stablecoin applications) to strive to become a leader in digital asset reserves in Asia.
Banking App Outages Impact Transactions; Taiwan’s Financial Resilience Under Test
Recently, the exchange rate of the New Taiwan Dollar experienced dramatic fluctuations akin to a “roller coaster,” with daily changes reaching as high as 5%, even briefly touching 28.812 TWD, triggering market panic, immense pressure on enterprises to exchange currency, and public dissatisfaction. KMT legislator Ge Ru-jun recently posted on Facebook, indicating that the recent sharp fluctuations in the exchange rate have exposed structural issues of policy ineffectiveness by the central bank and insufficient financial resilience.
Ge Ru-jun analyzed that although the appreciation of the New Taiwan Dollar might attract foreign investment in the short term, it hides significant risks. He expressed concern that foreign capital might be merely “hot money” seizing the opportunity of appreciation, and once the positive news runs out and the exchange rate reverses, there is a high probability that these investors will quickly cash out, leaving a hollow capital market and damaged local industries.
He also cited an example from shopping at a 3C store, where the operator reported that due to the banking app outage, transactions via card or mobile banking could not proceed smoothly throughout the day, demonstrating that under high-pressure currency exchange situations, Taiwan’s financial system not only proves that “financial diversification” is merely a slogan, but that “financial resilience” fails immediately. The export profits of small and medium enterprises could be entirely eroded due to the drastic fluctuations in exchange rates, even suffering losses of 7%.
In light of the significant changes in the global landscape and the fragility of the financial system, Ge Ru-jun strongly urged the government to face the urgency of “digital financial transformation” and reassess its financial reserve strategies. He pointed out that Taiwan’s foreign exchange reserves are highly concentrated in a single sovereign currency, lacking diversified hedging mechanisms, leading to extremely high risk concentration. The over-reliance on the U.S. dollar in financial reserve strategies has already been raised multiple times during general inquiries as lacking in diverse resilience.
U.S. and South Korea Actively Embrace Digital Assets! Taiwan’s Strategic Layout Cannot Fall Behind
Regarding foreign exchange strategic reserves, Ge Ru-jun suggested evaluating the inclusion of diversified assets such as Bitcoin. He criticized the central bank for rejecting the inclusion of Bitcoin in reserves this March on the grounds of “too much volatility,” while the recent volatility of the New Taiwan Dollar is nearly three times that of Bitcoin, highlighting the contradiction and self-refutation.
He believes the government and central bank should discuss incorporating Bitcoin as part of their strategic reserves to cope with future risks stemming from global currency, geopolitical, or technological disasters. Ge Ru-jun mentioned that 28 states in the U.S. are discussing Bitcoin strategic reserves, with 18 states actively advancing. He referenced recent developments indicating that after the Arizona State House passed related legislation (despite a veto from the governor), New Hampshire has become the first state in the U.S. to pass legislation on “strategic Bitcoin reserves,” allowing up to 5% of state total funds to be allocated to Bitcoin, which has already been signed by the governor.
This signifies that Bitcoin is no longer merely a speculative tool, but a reserve asset with systemic significance. Taiwan should learn from international examples to establish a digital asset reserve system that fits its national conditions. In addition to strategic reserves, Ge Ru-jun is also actively promoting digital financial applications.
He called for the accelerated promotion of blockchain technology and stablecoin applications, linking to the latest global trends, enabling businesses to achieve low-cost and high-efficiency on-chain settlement mechanisms for cross-border currency exchanges, thereby enhancing financial resilience. He also mentioned past efforts to allow qualified investors to purchase Bitcoin ETFs through delegated investment, and how the Financial Supervisory Commission had previously used South Korea’s ban as a pretext, while now it hears of the ruling party in South Korea planning to open Bitcoin ETFs, which not only breaks the excuses made by the commission but also shows that the world is accelerating its embrace of digital assets. He praised the current head of the Financial Supervisory Commission for being open-minded and willing to lead ahead of South Korea.
Ge Ru-jun emphasized that Taiwan has a complete opportunity to take the lead in Asia with the “Bitcoin strategic reserve.” He used Taiwan’s foreign exchange reserves of $500 billion as an example, stating that even if only 1% is allocated, it would constitute a strategic layout of $5 billion, enough for Taiwan to gain an edge in the global digital currency race. He urged, “If you don’t save now, you will regret it tomorrow!” In the face of various countries vying for positioning, Taiwan can no longer delay.
Finally, Ge Ru-jun called on the government to convene a cross-ministerial meeting to clearly define the regulatory responsibilities regarding stablecoins and digital assets, avoiding policies that continue to be “each saying their own thing, with no one taking responsibility.” He believes that a more diversified strategic reserve is a response to the current crisis and an investment in future economic security. The government must no longer be an obstacle to diversified preparedness and digital transformation, but should stride forward to become a leader in financial innovation, guiding small and medium enterprises and industries to meet the challenges of the new era.