Taiwan's President Lai Ching-te promotes a sovereign fund, and people in the crypto world may take the opportunity to advocate buying Bitcoin?

On the occasion of President Lai Ching-te's first anniversary in office, he unveiled a significant economic policy, announcing that the government will establish a sovereign fund to create a national-level global investment platform. This move not only demonstrates the government's high alertness to international economic trends but also symbolizes Taiwan's formal entry into a new era of leading global capital deployment with national strength. The Taiwanese government's promotion of the sovereign fund is likely to spark discussions in the domestic crypto world and may even give rise to calls for the government to buy Bitcoin as part of its investments, but is that realistic?

Establish a sovereign fund: government-led, private sector participation, jointly building a global investment platform.

President Lai stated that the Taiwanese government will establish a sovereign fund and build it into a forward-looking and strategic national-level investment platform. This fund will be government-led and will combine the resources and flexibility of private enterprises to invest in international markets, targeting major growth markets in the AI era. He emphasized that this will help the global layout of Taiwan's industries and enhance the country's visibility and influence in the international economy.

What is a sovereign fund (SWF)?

A Sovereign Wealth Fund (SWF) is an investment fund established by a country's government and is fully or majority controlled by the government. Such funds typically utilize national fiscal surpluses, trade surpluses, revenues from natural resources (such as oil and gas), foreign exchange reserves, and other funds to engage in long-term, global asset allocation and investment.

For example, Norway's "Government Pension Fund Global" and Singapore's "Temasek Holdings" are both globally recognized sovereign wealth funds.

Strengthening Domestic Industries: National Development Fund Upgrade, Building a Solid Economic Foundation

In addition to external investment strategies, Lai Ching-te also proposed a blueprint for internal industrial upgrading. He pointed out that the government will strengthen the functions of the National Development Fund, promote industrial reconstruction, and assist domestic small and medium-sized enterprises in their transformation and upgrading to enhance the overall international competitiveness of the industry. This move aims to strengthen the resilience of Taiwan's local supply chain, allowing local enterprises to maintain their adaptability and growth capabilities amid changes in the global economic landscape.

In response to changes in the international economic situation: Sovereign fund legislation will become a new focus.

President Tsai further explained in response to media questions that the promotion of the sovereign fund planning is a response to the current international economic strategic layout. He pointed out that the global economic situation is rapidly changing, and Taiwan needs to adjust its strategy in a timely manner, with the sovereign fund being a highly necessary and forward-looking tool. He emphasized that the sovereign fund will be established through the legislative process in the future to ensure that the government can effectively grasp investment directions and resource allocation.

Crypto world individuals may take the opportunity to promote: Sovereign funds have become a new focal point of discussion.

In recent years, members of the crypto world community in Taiwan have occasionally proposed following the example of countries like El Salvador by incorporating Bitcoin into national reserve assets. Now, the government has officially announced the establishment of a sovereign fund to enter the international market, which could very well become a new opportunity for the crypto world to make its voice heard again. Especially as Bitcoin is gradually being regarded as "digital gold" internationally, many supporters believe it has the characteristics of hedging and anti-inflation, making it suitable for long-term holding.

International trend reference: A few sovereign funds have ventured into crypto assets.

Although most sovereign funds around the world are still conservative and focus on traditional assets such as stocks, bonds, and infrastructure, there are a few examples that show interest in Crypto Assets. For instance, the Norwegian sovereign fund (NBIM) indirectly holds a small amount of Bitcoin through third-party funds. This international trend may become the argument cited by people in the Taiwan crypto world to advocate for buying Bitcoin.

Policy reality: The Taiwanese government is unlikely to directly allocate Bitcoin in the short term.

However, judging by the current policy style of the government, the likelihood of sovereign funds directly purchasing Bitcoin in the short term is low. The reasons include:

High volatility risk: Bitcoin prices fluctuate dramatically, which does not align with the asset allocation logic of most sovereign funds for stable value preservation.

Regulations are still unclear: Taiwan is still in the stage of gradually establishing a regulatory framework for crypto assets, and there is not yet a sufficient legal basis to support direct participation by the public sector.

Political Sensitivity: The government's investment in Bitcoin could easily trigger controversy and become a focal point for political attacks and defenses, especially in a highly democratic and diverse opinion society like Taiwan.

Possible future compromise solutions: indirect investment or innovative fund structures?

Although the possibility of directly buying Bitcoin is low, some "compromise solutions" may emerge in the future, such as:

Indirectly hold assets related to blockchain technology through funds;

Invest in Crypto Assets related companies, such as platforms, security services, or infrastructure companies;

Establish a venture capital subsidiary fund specifically targeting the Web3 and blockchain sectors.

Such strategies can participate in the growth dividends of emerging technologies while avoiding direct exposure to the price volatility of Bitcoin and regulatory issues.

This article discusses Taiwan's President Lai Ching-te promoting a sovereign fund, and whether those in the crypto world might take advantage of this to advocate for buying Bitcoin? Originally appeared in Chain News ABMedia.