US and Russia are making high-profile layouts for BTC! Should Taiwan follow suit? Chen Chong: Central Bank probably doesn't care.

BTC, the 'new type of reserve asset', has become an important strategic issue

Since its birth in 2009, BTC has experienced multiple doubts, speculations, and controversies, but still stands strong. It has now sparked a new wave on the global political and economic stage. For global central banks, facing the pressure of inflation and the concern of asset devaluation, whether to diversify issuance and consider BTC as a 'new type of reserve asset' has become an important strategic issue.

Former Premier of Taiwan and Chairman of the New Generation Financial Foundation, Chen Chong, recently published an article titled 'The New Generation Financial Game: The Formation is Stable' related to BTC.

The beginning of the article directly points out the core issue, 'If you are the governor of a central bank of a certain country, and you see the following 3 news in a short period of time, would you think it's a conspiracy? Or just a farce? Should you stand still? Or directly engage in BTC layout?'

President-elect Trump has proposed establishing a BTC reserve, and the United States currently holds about 200,000 BTC due to confiscation and other reasons. Senator Lummis has also proposed legislation requiring the purchase of 1 million BTC within 5 years.

Russian President Putin, on the eve of martial law in South Korea, suddenly made a statement supporting the replacement of the US dollar with BTC as the global reserve currency to stabilize the economic order.

After half a month of the US election, BTC has risen by 45%, breaking the 100,000 US dollar mark this month (and plummeted to 95,000 on December 10th).

This series of actions has already aroused speculation and discussion among the market and investors, and central banks around the world can no longer ignore the existence and influence of Bitcoin.

BTC is a financial game for the young generation.

Recently, the price of BTC has been soaring all the way, breaking through the $100,000 mark at the beginning of this month. The global BTC population has surged from millions to 560 million in the past 10 years. Chen Chong believes that the reasons behind this are related to loose monetary policies and global inflation, which cannot be ignored.

The article points out that due to the large price fluctuations of BTC, it cannot be used as a payment tool, nor is it a currency. At best, it is just a commodity, but it can be used as an investment tool. Therefore, as long as there are people following one after another, BTC will continue to exist.

In today's saturated traditional financial market, young people are unfamiliar with and do not prefer traditional finance, so they will naturally be more inclined towards emerging financial assets with home advantage.

In the face of such a trend, Chen Chong believes that the government should pay more attention to the awareness awakening of the young generation, in order to avoid the emergence of new class struggles.

However, government agencies have always failed to take seriously the social impact of BTC, and even the positioning of Virtual Asset Service Providers (VASPs) cannot be balanced.

Chen Chong pointed out that the Taiwan central bank has had little appetite for gold in the past 6 years, probably disdainful of BTC as well, but if it is indifferent to global inflation, the focus is still on traditional reserve assets, then there is a risk of shrinkage.

Should the central bank "invest in BTC layout"?

In recent years, central banks around the world have had very different attitudes towards gold and BTC. In traditional central bank asset allocation, gold has been seen as a representative of stable reserve assets, while BTC is seen as a commodity lacking intrinsic value. However, this view is gradually changing.

Federal Reserve Chairman Powell publicly stated last month that BTC can be regarded as "digital gold" and is not a competitor to the US dollar. The US Department of the Treasury subsequently expressed a similar view, positioning BTC as a store of value in the decentralized world.

The data also shows that more than a third of the global BTC holders are young people aged 24 to 35. The digital financial rules preferred by this new generation of financial players have gradually stabilized.

The global inflation problem continues to spread, and the foreign exchange reserves and gold that central banks have relied on over the past decade are at risk of losing their asset value. Especially after the 2008 financial crisis, quantitative easing policies have led to rapid expansion of money supply, further increasing inflationary pressures. If central banks continue to allocate assets based on traditional thinking, they may face further erosion of real purchasing power.

With the gradual shift in attitude of the Federal Reserve and the Treasury towards openness, whether the central bank should 'engage in BTC layout' has become an important policy debate.

"Look at the recent attitude of various countries, especially the United States, towards BTC. Think about the quantitative easing (QE) and inflation trends over the past decade. If you were the central bank, what strategy or action would you take? Would you diversify the reserve issuance? to buy or not to buy, that’s the question!"

[Disclaimer] The market is risky, and investment should be cautious. This article does not constitute investment advice. Users should consider whether any opinions, views or conclusions in this article are applicable to their specific situation. Invest at your own risk.

This article is authorized to be reproduced from: "Web3+"

Original author: Shao Yuanting

Original title: "The United States and Russia high-profile layout of BTC, should the central bank follow up?" Chen Chong: The new generation of financial games has stabilized"

"US-Russia High Profile Layout BTC! Should Taiwan Follow? Chen Chong: The Central Bank Probably Disdains It." This article was first published in "Crypto City".