Latest news with #NewTaiwanDollar
Crypto Insight
10-05-2025
- Business
- Crypto Insight
Taiwan lawmaker calls for Bitcoin reserve at national conference
Taiwanese lawmaker Ko Ju-Chun has called on the government to consider adding Bitcoin to its national reserves, suggesting it could serve as a hedge against global economic uncertainty. Ko, a legislator at-large in Taiwan's legislative body, the Legislative Yuan, took to X on Friday to report that he had advocated Bitcoin investment by the Taiwanese government at the National Conference on May 9. In his remarks, Ko cited Bitcoin's potential to become a hedge amid global economic risks and urged Taiwan to recognize the cryptocurrency alongside gold and foreign exchange reserves to boost its financial resilience. Ko's announcement came shortly after the legislator held talks with Samson Mow, who advocates for Bitcoin adoption by states like El Salvador at his BTC tech firm Jan3. Taiwan is an export-oriented economy Ko highlighted that Taiwan is an export-driven economy that has experienced significant fluctuations in its national currency, the New Taiwan dollar, amid global inflation and intensifying geopolitical risks. 'We currently have a gold reserve of 423 metric tons, and our foreign exchange reserves amount to $577 billion, including investments in US Treasury bonds,' the lawmaker stated. In a scenario of more intense currency volatility or potential regional conflicts, Taiwan may 'very likely be unable to ensure the security and liquidity,' Ko continued, adding that Bitcoin could be a great addition to Taiwan's reserves for several reasons. 'Bitcoin has been operating for over 15 years. It has a fixed total supply, is decentralized, and is resistant to censorship. Many countries are focusing on its hedging attributes. At the same time, in intense situations, it may not face the risk of embargo,' he said. Bitcoin is not the only solution Referring to many global initiatives considering Bitcoin adoption as a reserve asset, Ko stressed that he's not advocating for Bitcoin as the 'only solution' to rising economic challenges. Instead, the legislator suggested adding a 'small proportion of Bitcoin' into the diversified assets as tools for sovereign asset allocation and risk hedging, and backup capacity of Taiwan's financial system. He previously suggested that Taiwan could allocate a maximum of 5% of its $50 billion reserve to Bitcoin in an X post on May 6. 'When exchange rate risk and regional uncertainty increase, it is time to introduce new tools to construct a more flexible financial strategy framework,' Ko said, adding: 'As former Dean Chen Chong said, Bitcoin is the gun of the digital era. It may also be the gold of the digital era, the silver of the digital era. Or it could be gunpowder. A wise nation will not let weapons be in others' hands.' The news comes as Taiwan is emerging as a crypto-friendly jurisdiction, with the Financial Supervisory Commission pushing institutional trials of crypto custody services in late 2024. Mainland China continues to maintain its hostile stance on cryptocurrency after imposing a ban on multiple crypto activities, including mining, in 2021. Source:
Business Mayor
10-05-2025
- Business
- Business Mayor
Taiwan eyes Bitcoin as hedge against inflation and US Treasury exposure
Lawmaker Ko Ju-Chun suggests adding Bitcoin to national reserves. Taiwan has 423 metric tons of gold in its asset base. New Hampshire in the US passed a law to include Bitcoin in state reserves. Taiwan is considering a significant policy shift—one that could see Bitcoin join its national reserves. Faced with inflationary pressure, global trade tension, and increasing reliance on US Treasury bonds, the country is now questioning whether its financial buffers are truly secure. Legislator Ko Ju-Chun recently proposed the inclusion of Bitcoin in the central bank's reserve mix, citing its decentralised nature and fixed supply as a strategic hedge against future financial instability. The proposal reflects a broader reassessment of traditional reserve assets, especially as over 90% of Taiwan's US$577 billion in foreign exchange reserves are currently tied to US Treasuries, raising concerns about diversification and liquidity during crises. Rising currency risks and dependency on US Treasuries Taiwan's export-led economy is particularly sensitive to geopolitical shifts and inflation trends. With growing tensions between the US and China and the risk of supply chain disruptions, lawmakers are increasingly alert to the vulnerabilities of the New Taiwan Dollar (NTD). Currently, Taiwan holds 423 metric tons of gold and nearly all its foreign exchange in US dollar-denominated assets. Analysts note that while these have been historically reliable, their over-concentration exposes the country to US monetary policy and potential sanctions should relations deteriorate. In an address to parliament, Ko Ju-Chun highlighted that Taiwan needs 'strategic flexibility' in how it manages its reserves, especially under scenarios of financial decoupling or restricted access to dollar markets. Read More Solana (SOL) Price Prediction: 2023, 2024, 2025 and Beyond Bitcoin floated as a hedge, not a replacement The core of the proposal is not to upend Taiwan's current reserve strategy but to diversify it. Ko's plan calls for allocating a small percentage of Taiwan's reserves to Bitcoin, which he argues would provide an uncorrelated asset that is globally accessible and cannot be arbitrarily inflated. Bitcoin's fixed supply of 21 million tokens, combined with its decentralised ledger system, is a key reason why it is being considered. According to Professor Liu Yiru of National Taiwan University, these features make it particularly resistant to inflationary dilution—unlike fiat currencies, which central banks can expand during economic shocks. Former Premier Chen Cong also weighed in, stating that although Bitcoin may not serve as a transactional currency at scale, its role as a digital store of value could help safeguard Taiwan's financial sovereignty. Global momentum for Bitcoin reserves Taiwan's deliberation comes at a time when other governments are also experimenting with Bitcoin at the state level. In the US, New Hampshire recently passed the Bitcoin Reserve Act, allowing the inclusion of the digital asset in its state reserves. The move has prompted discussions in other American states and emerging markets facing high inflation or currency instability. While Taiwan has yet to formalise any such measure, the conversation signals a shift in how policymakers view crypto-assets, not merely as speculative investments but as potential components of national financial infrastructure. In addition to legislative interest, Ko suggested that a task force be set up to study the feasibility, volatility, and custodial risks associated with Bitcoin reserves. The central bank has not publicly responded to the proposal, though it is expected to be discussed further in upcoming budget and monetary policy reviews. The broader context of these debates also includes Taiwan's need to balance its strong technological sector with the risks posed by its geopolitical location. Diversifying reserve assets may serve not only economic goals but also broader strategic autonomy.
Yahoo
10-05-2025
- Business
- Yahoo
U.S. dollar's slide is the ‘bane' of Asia's central bankers
The New Taiwan Dollar made headlines this week after it gained over 5% against the U.S. dollar before the island's central bank stepped in to curb what it deemed 'excessive' inflows. The NTD's shift may have been the most dramatic move this week, but the U.S. dollar strengthened against several currencies this week, including the Malaysian ringgit, the Singapore dollar, and the Indonesian rupiah. Even the Hong Kong Monetary Authority, the city's de facto central bank, had to recently sell Hong Kong dollars to maintain the city's peg against the U.S. dollar. For years, some Asian countries griped about a too-strong U.S. dollar, complaining that it contributed to inflation by making needed imports like food and fuel more expensive. Now, countries are getting what they wished for—a weakening dollar—but the results appear to be decidedly negative for one set of officials: Central bankers. On Monday, Yang Chin-long, governor of Taiwan's central bank, said that officials had intervened in the market to curb 'excessive' inflows, without giving details. Yang made the comments after a sudden 9% two-day rise in the NTD's value versus the dollar. The central bank leader also denied that the currency exchange rates were part of trade negotiations with the U.S. 'Foreign exchange volatility is the bane of central bankers,' noted Priyanka Kishore, director and principal economist at the consultancy Asia Decoded. Central bankers may not care about the direction of a currency's move, but they still want shifts to be orderly. 'Heightened volatility, if sustained over a period of time, fuels uncertainty and has financial and real economic consequences,' Kishore said. For example, a quickly strengthening currency will hurt exporters, already under strain from tariffs. 'Sharp appreciation impacts their outlook and planning, and also erodes competitiveness,' Kishore added. Taiwan's insurance firms have also invested heavily in the U.S., particularly in bonds. Insurers may have been 'somewhat under-hedged' against the dollar, suggested Danny Khoo, country head of sales trading for Saxo Bank in Singapore. 'When all of them try to do that at the same time, that could be why the New Taiwan dollar got hit slightly harder compared to other Asian currencies,' he added. Still, a weakening U.S. dollar is still good news for some Asian economies, particularly those that hold U.S. dollar-denominated debt. A weaker U.S. dollar reduces the debt burden for these countries. Some emerging Asian economies prefer to take advantage of relatively lower interest rates by borrowing in U.S. dollars instead of in their local currencies. A weaker dollar may also be good for Asian consumers, as it makes imports less expensive. The U.S. dollar has sunk this year in the wake of U.S. President Donald Trump's changes to trade policy. 'Trump's very harsh tariff policies don't give a lot of confidence in the U.S.,' Khoo said. 'People are not as confident in the U.S. economy and the political landscape.' The dollar index trended upward in the latter part of this week, after the U.S. announced a trade deal with the U.K. Asian countries currently in negotiations with the Trump administration might see a stronger currency as an asset. The U.S. president has complained that a strong dollar makes U.S. exports less competitive, and has accused countries like Japan and China of manipulating their currencies. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
06-05-2025
- Business
- CNBC
Taiwan dollar eases after historic surge as officials deny currency talks with U.S.
Workers at a wet market count and return New Taiwan Dollar notes to customers, as Taiwan is expected to show positive GDP and economic growth, amid the covid-19 pandemic, in Taipei, Taiwan, 15 Aug 2021. Taiwanese dollar pulled back Tuesday after a historic surge that saw it clock multi-decade gains amid speculation about pressure from Washington on strengthening the local currency. It weakened over 3% against the U.S. dollar on Tuesday, after a meteoric 9% rally over the previous two trading days to hit three-year highs, and logging its sharpest daily gains Monday since at least 1981 according to LSEG data. Despite Tuesday's weakness, the Taiwanese dollar is still up over 8% this year against the greenback, while the U.S. dollar index is down by the same year to date. "We're seeing currency moves more [volatile] than what we saw during the Asian financial crisis era," said David Chao, global market strategist at Invesco. The recent dramatic upward swings in the currency were largely driven by exporters' rush to convert U.S. dollar reserves to the local currency as the U.S. dollar faltered, and life insurers' intensified hedging for their U.S. dollar debt holdings, experts said. Taiwanese life insurers are among Asia's largest holders of U.S. bonds and have been sitting on huge, underhedged U.S. dollar exposures, according to market analysts. Investors are closely monitoring the Taiwanese central bank as its "notable absence" has fanned speculation that the authorities were tolerating a stronger currency to win trade concessions from U.S., said Stefan Angrick, Head of Japan and Frontier Market Economics at Moody's Analytics. "The central bank has been unusually hands-off amid soaring forex volumes." Governor Yang Chin-long said at a press conference Monday that Taiwan's central bank had stepped in to curb what it deemed as "excessive" inflows while refuting claims that exchange rates were part of the U.S. trade negotiation. He did not elaborate on the nature of intervention. Despite official denial, foreign exchange rates might "quietly be on the table in broader U.S.-Taiwan trade conversation," Angrick said. President Donald Trump has advocated for a weaker greenback to boost U.S. export competitiveness. Analysts are also largely skeptical of any meaningful intervention from the central bank so far. The Taiwanese dollar has already reached the upper bound of the central bank's monitoring range, Invesco's Chao said, "If the central bank continues to step back, that may be the market's cue that a quiet currency realignment is underway." Tuesday's pullback was mostly due to the returning dollar demand by importers, according to Michael Wan, FX strategist at MUFG Bank, who believes the central bank has not intervened "very aggressively." Separately, Taiwan's financial supervisory commission has reportedly held meetings with some of the island's largest insurers to assess the risks a weaker greenback poses to their U.S. bond holdings. Three insurers said their risk-based capital remains within regulatory standards, according to Taipei-based Economic Daily News. Analysts see room for further gains in Asian currencies including Taiwanese dollar, betting that Trump tariffs could backfire on the American economy and that signs of progress in U.S.-China trade talks may revive trade flows in the region, supporting demand for Asian assets. "Momentum behind TWD strength may have legs if the broader de-escalation narrative holds, [and] if tariff implication on growth proves more manageable than feared," said Christopher Wong, currency strategist at OCBC Bank. "A more market-determined TWD may be helpful during trade talks." U.S. senior officials, including Treasury Secretary Scott Bessent, have recently sounded more upbeat about the prospects for reaching a trade deal with China. Beijing last week also signaled its openness to start trade negotiation with Washington. Besides the Taiwanese dollar, other Asian currencies have also rallied in recent weeks as the U.S. dollar has faltered. Chinese offshore yuan hit a six-month high of 7.1834 against the greenback on Monday, before paring some of the gains on Tuesday. "Currencies with the largest trade surpluses are more exposed to fears of a 'Plaza Accord 2.0,' and TWD is at the top of this list," said Ju Wang, head of Greater China FX & rates at BNP Paribas. Plaza Accord refers to an agreement signed in 1985 when G5 nations agreed to depreciate the U.S. dollar against the German mark and the Japanese yen to address trade imbalances. The Taiwan dollar's sharp rally piled on some pressure on the island's export-heavy tech sector, as a stronger local currency makes goods expensive for foreign buyers, reducing its competitiveness. Taiwan Semiconductor Manufacturing Co shares fell for a second day, losing nearly 2% on Tuesday. Every one percentage point of appreciation in the Taiwanese dollar is estimated to trim TSMC's operating margin by approximately 0.4 percentage point, said Brady Wang, Associate Director at Counterpoint Research. A stronger local currency reduces the value of its U.S. dollar-quoted revenue and most of TSMC's operations are in Taiwan. The world's largest contract chipmaker gave its second-quarter earnings forecast on the assumption of a USD/TWD exchange rate of 32.5. Stock chart icon US Dollar/Taiwan Dollar FX Spot Rate "Local chip and electronics manufacturers, which earn the bulk of their revenue in U.S. dollars, will feel the pinch as those earnings translate into fewer local dollars," said Angrick. But strong global chip demand may still be able to cushion the blow, Angrick added, noting the artificial intelligence boom and the push for advanced chips will continue to make Taiwan a critical supplier with few close competitors. Many exporters also appear to be well hedged. TSMC, for example, books both revenue and costs largely in dollars, while others rely on forex contracts or price adjustment clauses, said Phelix Lee, an equity analyst covering tech firms. Taiwan Semiconductor Manufacturing Co shares fell for a second day Tuesday, losing nearly 2%, while Hon Hai Precision Industry Co gained 2.5%.
