Bitcoin Think Tank recommends that Taiwan’s foreign exchange reserves include 5% BTC; if that happens, it would suddenly make Taiwan the world’s largest holder.

Bitcoin Policy Institute recently published a research report on Taiwan. The report states that if Taiwan incorporates Bitcoin into its foreign exchange reserves, it will bring multiple strategic advantages in geopolitics, economy, and international trade, especially when facing China’s potential military pressure and risks within the dollar system, providing critical hedging and resilience value.

The report recommends Taiwan allocate 1% to 5% of its reserves in Bitcoin. As of the end of February 2026, Taiwan’s foreign exchange reserves amount to $605.49 billion, ranking fourth globally. Investing 5% would be $30 billion. At today’s prices, this could buy approximately 448,710.32 BTC. This would directly surpass the U.S. government, which holds 328,000 Bitcoin, and become the world’s largest holder.

Bitcoin Policy Institute: Taiwan holds a large amount of U.S. debt and therefore needs Bitcoin reserves more

The background of this report stems from internal policy discussions in Taiwan in 2025. At that time, some legislators proposed allocating about 5% of foreign exchange reserves into Bitcoin; the central bank subsequently began evaluations but ultimately concluded that due to high volatility, insufficient liquidity, and regulatory risks, it was not suitable as a reserve asset. However, the report suggests that the central bank’s conclusion mainly reflects that “the timing is not yet ripe,” rather than a rejection of Bitcoin’s long-term value.

(Taiwan government holds the ninth-largest amount of Bitcoin in the world! Kuo Ju-jun calls for establishing a strategic reserve of NT$570 million in BTC)

From a structural perspective, Taiwan’s current foreign exchange reserves are highly concentrated in U.S. dollar assets. The report notes that by 2025, over 80% of Taiwan’s reserves are dollar-denominated assets, with a total scale reaching several hundred billion dollars. This structure has supported export-driven economic growth over the past decades but also exposes Taiwan to risks of dollar devaluation.

(Taiwan holds over 80% of its foreign exchange in U.S. debt! Lin Tai-hua criticizes “people’s life-saving money becoming foreign countries’ IOUs”—central bank submits report in two weeks)

The report further analyzes that since the U.S. implemented quantitative easing in 2008, the monetary base has expanded by over 500%, while debt-to-GDP ratio remains around 120%, indicating ongoing long-term fiscal pressure. Against this backdrop, the possibility of future inflation to dilute debt increases; for countries holding large amounts of U.S. dollar assets, real purchasing power may be eroded.

Geopolitics: Bitcoin may be the only asset available at any time

Beyond currency risks, geopolitics is also a core focus of the report. It points out that in scenarios where China might impose blockades or military actions against Taiwan, existing reserve assets each have significant limitations. Gold could lose liquidity due to transportation difficulties or confiscation, while U.S. dollar assets could be restricted by international political influences. In contrast, Bitcoin, as a digital asset, does not rely on physical transportation nor is it controlled by a single country, enabling it to maintain accessibility and transferability in extreme situations.

The report even suggests that in scenarios of blockades or exile governments, Bitcoin could be the only reserve asset that can be guaranteed to be “available at any time,” as it can be transferred cross-border via encryption without relying on financial intermediaries.

On the economic front, the report also warns that Taiwan faces “dual risks.” On one hand, the demand driven by the AI industry for semiconductors supports exports; but if the AI investment bubble bursts, it could impact Taiwan’s core industries. On the other hand, the U.S. may respond to recession with easing policies, further diluting the dollar’s value. Under these circumstances, Taiwan faces declining income and reserve devaluation pressures simultaneously.

By 2026, 40 countries hold Bitcoin

The report believes that Bitcoin has potential hedging effects in this environment. Historical experience shows that during periods of liquidity expansion, scarce assets tend to appreciate in value, and Bitcoin’s fixed supply and anti-inflation characteristics allow it to benefit during monetary expansion cycles.

Additionally, the report compares Bitcoin with gold. While both serve as stores of value, Bitcoin clearly outperforms gold in portability, divisibility, and transaction efficiency. For example, transporting large amounts of gold costs millions of dollars, whereas Bitcoin can be transferred across borders within minutes at minimal cost.

From a global trend perspective, Bitcoin is gradually entering the asset allocation considerations of nations. The report states that by early 2026, about 40 countries have holdings or plans to hold Bitcoin through various means, including strategic reserves, mining, asset allocation, and payment applications, indicating that sovereign-level adoption is accelerating.

In conclusion, the report emphasizes that for Taiwan, “resilience” is a core strategic goal, and Bitcoin offers an alternative to traditional financial systems. Even allocating just 1% to 5% of reserves could reduce overall risk while enhancing the ability to counter currency devaluation and geopolitical shocks. The report suggests that Taiwan does not need to abandon its existing dollar and gold systems but should incorporate Bitcoin to build a more resilient and risk-resistant reserve structure, further strengthening strategic autonomy in uncertain times.

As of the end of February 2026, Taiwan’s foreign exchange reserves stand at $605.49 billion, ranking fourth globally. Investing 5% would be $30 billion. At today’s prices, this could buy approximately 448,710.32 BTC. This would directly surpass the U.S. government, which holds 328,000 Bitcoin, becoming the world’s largest holder.

This article, Bitcoin Policy Institute recommends Taiwan include 5% BTC in its foreign reserves; if realized, it would become the world’s largest holder. It first appeared on Chain News ABMedia.