Taiwanese have too much idle money! Central Bank proposes three solutions for excess savings, can investing in Bitcoin ETF be an option?

Facing the challenge of excessive domestic savings, the central bank has proposed a series of innovative solutions aimed at guiding funds towards paths that are more beneficial to the country's economic development. With Deputy Governor Yan Tsung-ta set to deliver a special report at the Legislative Yuan Finance Committee next Monday (the 18th), the public is eagerly anticipating the details and potential impact of these strategies.

Taiwanese Have Excess Savings! Central Bank Proposes Three Solutions

Guiding Funds: Boosting Private Investment and Public Infrastructure

The central bank emphasizes that the key to overcoming excessive savings lies in enhancing the ability of the private sector to participate in Build-Operate-Transfer (BOT) public infrastructure projects, thereby boosting private investment. This includes not only accelerating public infrastructure investment and guiding insurance funds into important construction projects but also covers the development of infrastructure in response to the declining birth rate and aging population trends, such as applications of artificial intelligence (AI), social housing, long-term care services, as well as accelerating environmental protection projects like green energy and electric vehicles.

Financial Innovation: Developing Financial Services and Wealth Management

Facing the high household savings rate, the central bank proposes redirecting private funds towards the development of the financial services and wealth management industries to increase the productivity of the financial industry. The central bank points out that with the aging population trend, the demand for retirement financial planning and wealth inheritance is increasing. Domestic financial institutions can provide comprehensive wealth management solutions for the public through services such as trusts and tax consultation.

Global Expansion: Actively Engaging in Cross-Border Mergers and Acquisitions

In order to overcome geographical restrictions on production factors, the central bank suggests utilizing excess savings for cross-border mergers and acquisitions to acquire key technologies and strategic resources. This not only helps Taiwanese companies expand globally and strengthen the resilience of the supply chain but also enhances the global layout capability of the supply chain amid increasing geopolitical risks, ensuring Taiwan's solid position in the global value chain.

As these strategies of the central bank are gradually implemented, it is expected to effectively guide excess domestic savings towards areas that contribute to sustained economic growth and innovation, thereby creating a new phase in the country's economic development.

Diversifying Investments: Why Not Bitcoin ETFs?

Although Taiwan's Financial Supervisory Commission has not allowed domestic entities to establish Bitcoin ETFs or open up delegated purchase of Bitcoin ETFs, from the perspective of addressing excess savings, opening up investment in Bitcoin ETFs has the following advantages:

Taiwan prohibits the use of delegated methods to purchase cryptocurrency-related securities, and Bitcoin spot and futures ETFs are under regulation.

Enhancing the Financial Services and Wealth Management Industry

The opening of Bitcoin ETFs can be seen as expanding the scope of financial products and enhancing innovation in the financial services industry. This not only attracts investors interested in cryptocurrencies but also provides new investment tools for wealth management services, helping to increase the productivity and diversity of the financial industry. This move aligns with the central bank's strategy of "guiding private funds into the development of financial services and wealth management businesses."

Utilizing Excess Savings

Bitcoin ETFs provide a new and innovative investment channel compared to traditional financial markets. This can help guide excess savings into new investment areas, leading to more efficient capital allocation. Additionally, the global nature of cryptocurrencies like Bitcoin provides Taiwanese investors with a tool to participate in the global market, seek cross-border mergers and acquisitions, and global expansion opportunities.

The chairperson of the Financial Supervisory Commission announced the proposal of a virtual currency special law in September, could Taiwanese have the opportunity to delegate Bitcoin ETFs?

Boosting Private Investment and Innovation

The Bitcoin and other cryptocurrency sectors are rapidly evolving and highly innovative markets. Opening up investment in Bitcoin ETFs not only stimulates private investment but also encourages financial technology innovation and development. This is beneficial for promoting the growth of related technologies and industries and enhancing the country's competitiveness in the global financial technology sector.

Diversification of Investments, Reducing Market Risks

In the current global economic environment, cryptocurrencies like Bitcoin are seen by some investors as a hedge against traditional market fluctuations. The opening of Bitcoin ETFs provides investors with the opportunity to participate in cryptocurrency investments through traditional financial markets, which helps diversify investment portfolios and may reduce overall market risks.

In conclusion, opening up investment in Bitcoin ETFs can be seen as a means to address the issue of excess savings while bringing new momentum and opportunities to Taiwan's financial market and economic development. This requires policy support and regulatory innovation to promote it based on an evaluation of related risks.

Legislator Ke Ju-jun questions the Financial Supervisory Commission: Prohibiting delegated purchase of Bitcoin ETFs is a lose-lose situation, and investor rights should be protected.