Bitcoin as a 'new type of reserve asset' has become an important strategic issue.
Since Bitcoin's birth in 2009, it has undergone numerous doubts, speculation, and controversies but remains steadfast. Now, it has sparked a new wave on the global political and economic stage. For global central banks, facing inflationary pressures and concerns about asset devaluation, whether to diversify reserves and consider Bitcoin as a 'new type of reserve asset' has become an important strategic issue.
Chen Chong, former Premier of Taiwan and chairman of the New Generation Financial Foundation, recently published an article on Bitcoin titled (The New Generation of Financial Games: Positions Have Stabilized).
The article begins by directly pointing out the core issue: "If you were the governor of a central bank in a certain country and saw the following three news items in a short period, would you think it was a conspiracy theory? Or just a farce? Would you remain inactive? Or would you directly invest in Bitcoin?"
President-elect Trump advocates for establishing Bitcoin reserves, and the U.S. government currently holds about 200,000 Bitcoins due to confiscation and other reasons. Senator Lummis has also proposed legislation requiring the purchase of one million Bitcoins within five years.
During a state of emergency in South Korea, Russian President Putin suddenly made comments supporting the replacement of the U.S. dollar with Bitcoin as a global reserve currency to stabilize the economic order.
Half a month after the U.S. elections, Bitcoin has risen by 45%, and this month it even broke the $100,000 mark (on December 10, it plummeted again to $95,000).
This series of actions has already sparked speculation and discussion among the market and investors, and central banks can no longer ignore the existence and influence of Bitcoin.
Bitcoin: The Financial Game of the Young Generation
Recently, Bitcoin's price has skyrocketed, breaking the $100,000 mark at the beginning of this month. Over the past decade, the global Bitcoin population has surged from around one million to 560 million. Chen Chong believes that the reasons behind this are related to monetary easing policies and global inflation, which cannot be ignored.
The article points out that due to Bitcoin's significant price volatility, it cannot be used as a payment tool, nor is it a currency; at most, it is just a commodity. However, it can serve as an investment tool. Therefore, as long as there are people willing to invest, Bitcoin will continue to exist.
In today's saturated traditional financial market, young people are unfamiliar with and do not prefer traditional finance, naturally gravitating towards emerging financial assets that have a home-field advantage.
In light of this trend, Chen Chong believes that the government should pay more attention to the awakening of the consciousness of the younger generation regarding class mobility to avoid the emergence of new class struggles.
However, government agencies have yet to recognize the social impact of Bitcoin; even the positioning of virtual asset service providers (VASP) cannot be properly addressed.
Chen Chong pointed out that Taiwan's central bank has shown little interest in gold over the past six years and likely looks down on Bitcoin as well. However, if they remain indifferent to global inflation and focus solely on traditional reserve items, the assets may face devaluation.
Should central banks 'invest in Bitcoin'?
Over the years, global central banks have had vastly different attitudes towards gold and Bitcoin. Gold has historically represented a stable reserve asset in traditional central bank asset allocation, while Bitcoin has been seen as a commodity lacking intrinsic value. However, this view is gradually shifting.
Last month, U.S. Federal Reserve Chairman Powell made a rare public statement that Bitcoin can be regarded as 'digital gold' and is not a competitor to the U.S. dollar. The U.S. Treasury Department subsequently expressed a similar view, positioning Bitcoin as a store of value in a decentralized world.
Data shows that globally, more than one-third of Bitcoin holders are young people aged 24 to 35. The preferences of this new generation of financial players for digital financial rules have gradually stabilized.
The ongoing global inflation problem continues to escalate, and the foreign reserves and gold that various central banks have relied on for the past several decades are facing the risk of asset devaluation. Especially after the 2008 financial crisis, quantitative easing policies have rapidly expanded the money supply, further increasing inflationary pressures. If central banks continue to allocate assets with traditional thinking, they may face further loss of real purchasing power.
As the attitudes of the Federal Reserve and the Treasury Department in the U.S. gradually shift towards openness, the question of whether central banks should 'invest in Bitcoin' has become an important policy debate.
"Look at the recent attitudes of various countries, especially the U.S., towards Bitcoin. Consider the QE and inflation trends over the past decade. If you were the central bank governor of a certain country, what strategies or actions would you take? Would you diversify your reserves? To buy or not to buy, that’s the question!"
[Disclaimer] The market carries risks, and investment should be approached with caution. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions herein align with their specific circumstances. Invest at your own risk.
This article is reprinted with permission from: (Web3+)
Original author: Shao Yuanting
Original title: (The U.S. and Russia are making a big move on Bitcoin. Should Taiwan follow suit? Chen Chong: The new generation of financial players has stabilized their positions.)
'The U.S. and Russia are making a big move on Bitcoin! Should Taiwan follow suit? Chen Chong: The central bank probably looks down on it.' This article was first published in 'Crypto City.'
