Bitcoin National Reserve – 2025 Second Innovation and Derivatives Regulatory Strategy Forum
Since the Trump administration took office, the possibility of Bitcoin being used as a national reserve asset has sparked global debate. In response to this international trend, the Bitcoin and Virtual Currency Development Association held the “Bitcoin National Reserve – 2025 Second Innovation and Derivatives Regulatory Strategy Forum” today (13th), inviting former Premier Chen Chien-jen, former Minister of Finance Liu Yih-ru, and Legislative Yuan Member Dr. Ko Ru-jun, as well as representatives from various government agencies and industry experts to discuss related topics.
At the opening of the forum, Chairman of the Securities and Futures Bureau of the Financial Supervisory Commission (FSC), Zhang Zhenshan, stated that the cryptocurrency industry is rapidly developing globally, creating numerous opportunities. However, with innovation comes considerable risks, particularly concerning fraud related to cryptocurrencies. Zhang Zhenshan emphasized that properly handling these issues is crucial for the long-term development of the industry.
Currently, Taiwan’s FSC supervises the cryptocurrency industry in four stages. The FSC has already introduced the “Virtual Asset Platform and Transaction Business Anti-Money Laundering and Countering the Financing of Terrorism Regulations” and is preparing to implement a specialized law, moving into the fourth stage of regulation.
Zhang Zhenshan stressed that he is optimistic about the future development of Taiwan’s virtual asset industry and hopes to collaborate with businesses and blockchain technology experts to jointly promote the industry’s stable growth.
Are Fiat Currency and Stablecoins Inherently Incompatible?
Professor Liu Yih-ru from the Department of Finance at National Taiwan University shared her views on cryptocurrency development at the forum and recounted her early experiences with Bitcoin. She began by referencing the South Korean drama “W – Two Worlds” and argued that traditional finance and cryptocurrencies are like two parallel worlds. However, she believes that these two worlds will gradually move from mutual incomprehension to eventual integration.
Liu Yih-ru recalled that when she first held a cryptocurrency forum in 2017, many people were unfamiliar with and skeptical of the concept. However, she firmly believed in the potential of cryptocurrencies, inspired by economist Hayek’s thoughts on the de-nationalization of money.
In his book, “The Denationalization of Money,” Hayek argued that money should not be issued and controlled by the government or central banks but rather should be left to private entities (banks) to issue competitive currencies. Bitcoin, with its decentralized characteristics, rose closely in connection with global financial crises, government policies, and other factors. Since Bitcoin’s inception, from being unrecognized to the recent official launch of cryptocurrency spot ETFs in the United States, 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 US dollar, is essentially a way for the United States to expand the influence of the dollar.
Liu Yih-ru pointed out that Bitcoin, due to its significant price volatility, leads many to believe that cryptocurrencies are unsuitable for inclusion in national strategic reserves. However, for the United States, the situation is somewhat different. There are currently 203 types of stablecoins in the U.S. market, of which 93% are pegged to the US dollar, making Bitcoin’s price fluctuations have a relatively minimal impact on the overall financial system.
In fact, as the demand for Bitcoin grows, the demand for stablecoins also increases, further driving the demand for US dollars and US Treasury bonds, thus reinforcing the global position of the dollar. Therefore, incorporating Bitcoin into the United States’ strategic reserves may indirectly promote the development of stablecoins and strengthen the influence of the dollar. This may be one of Trump’s possible strategies.
Is Bitcoin a Currency or an Asset? Should Bitcoin Be Included in Foreign Exchange Reserves?
Bitcoin Should Not Be Considered for Foreign Exchange Reserves
Regarding whether Bitcoin is suitable as a foreign exchange reserve, former Vice Governor of the Central Bank, Xu Jiadong, stated, “Bitcoin is not a currency, and central banks will never consider it (for foreign exchange reserves) in the future.”
Xu Jiadong pointed out that foreign exchange reserves are vital to the stability of a nation’s economy. However, managing these reserves effectively in the face of globalization and changing financial environments presents a significant challenge. Foreign exchange reserve management is not only influenced by external market risks but also by internal policies and political conditions. Particularly during international financial crises, substantial foreign exchange reserves can effectively help stabilize a country’s economy.
The functions of foreign exchange reserves include adjusting foreign exchange liquidity, stabilizing exchange rates, responding to unforeseen needs, earning interest (from both “property” and “rights” under civil law), and other economic and non-economic functions, such as establishing a sovereign wealth fund or promoting diplomatic relations.
Xu Jiadong stated that traditional methods of managing foreign exchange reserves no longer fit the current international market. Innovative strategies, such as sovereign wealth funds, should be explored to improve asset operation efficiency. However, despite the rise of emerging tools like digital currencies, their high volatility makes them unsuitable as substitutes for foreign exchange reserves.
Bitcoin Should Be Considered for Foreign Exchange Reserves
Li Chuan-si, Senior Advisor of the Taiwan External Trade Development Council, expressed a different view. Li pointed out that the trade structure challenges faced by the United States involve not only international trade flows but also the future fate of the US dollar as the global reserve currency.
Although Trump was often seen as an unconventional political figure, his cabinet team had a clear economic strategy for the United States. Li emphasized that Trump’s economic policies were not limited to trade tariffs and monetary policies, but rather a deeper logic of changing the international trade structure to reconfigure the US’s position in the global economy.
Li Chuan-si stressed that if the United States wants to maintain its global economic leadership, it must reset the international trade structure. While the relationship between the dollar and US Treasury bonds remains crucial, the increasing pressure on relying on the dollar for global trade, with the United States no longer being the largest producer globally, presents challenges.
Li noted that this is not just an issue of monetary policy but also about how the United States can revitalize its industry, improve domestic wealth disparity, and address the growing trade deficit and international competitive pressures.
With the rise of digital currencies (such as Central Bank Digital Currencies or CBDCs) and stablecoins, the traditional reserve currency structure is facing unprecedented challenges. Coupled with China’s digital currency strategy and the roles of Bitcoin and gold in international reserves, these factors could have a disruptive impact on global trade structures.
Li emphasized that the competition regarding the form of money and financial sovereignty is not just a contest between the United States and China, but a pivotal moment for reshaping the global financial order.
Lin Hongyu, Chairman of the Bitcoin and Virtual Currency Development Association, also believes that if the United States includes Bitcoin in its strategic reserves, it would represent the global largest economy’s recognition of cryptocurrencies.
Lin Hongyu suggested that Taiwan should actively consider response strategies, such as formulating specialized laws, including Bitcoin in foreign exchange reserves, or investing through sovereign funds, rather than merely debating its asset classification.