Geopolitical, Economic, and Trade Benefits of Establishing a Bitcoin Reserve for Taiwan

Executive Summary

In November 2025, Taiwan's Central Bank of China (CBC) agreed to evaluate bitcoin as a potential reserve asset, following a legislative proposal to allocate 5% of reserves to the digital commodity. By December, the CBC concluded bitcoin was unsuitable due to volatility, liquidity, and custody concerns—but committed to a "digital asset sandbox" using 210 seized bitcoin for future testing.

The case for reconsideration is rooted in Taiwan's reserve composition. TSMC-driven exports produced a record $157 billion trade surplus in 2025, yet more than 80% of the CBC's $602 billion in reserves sit in USD-denominated assets. Since 2008, the Fed has expanded the monetary base by 526%, U.S. debt-to-GDP exceeds 120%, and a potential AI bubble burst could simultaneously slash semiconductor revenues and accelerate USD debasement.

Bitcoin addresses these risks directly. It matches gold in durability and fungibility while excelling in scarcity, divisibility, and portability—resolving the logistical and sovereignty concerns that led the CBC to halt gold accumulation.

Taiwan would join 29 countries that have gained bitcoin exposure as of January 2026, a trend accelerated by the U.S. Strategic Bitcoin Reserve executive order. Uniquely for Taiwan, bitcoin provides geopolitical resilience: in a PRC blockade or invasion, gold is stranded or seized and USD reserves face potential restrictions, but bitcoin remains fully accessible without physical transport. The CBC's concerns are valid but addressable with institutional expertise on custody, liquidity, and volatility. Paired with gold, bitcoin offers a hedge against debasement, geopolitical insurance, and new avenues for digital trade.