A Hong Kong legislator wants the special administrative region to take advantage of China’s “one country, two systems” policy to include Bitcoin in its national reserve for financial security.
Wu Jiexhuang, a member of Hong Kong’s Legislative Council, told state-owned newspaper Wen Wei Po that Hong Kong could study the market impact of United States-based spot Bitcoin (BTC) exchange-traded funds (ETFs).
Jiexhuang pointed to smaller nations, such as El Salvador and Bhutan, which have integrated Bitcoin into their strategic reserves, as well as certain US states. He added that US President-elect Donald Trump’s proposal to make Bitcoin a strategic reserve asset could have a significant impact on traditional markets.
China’s role in ensuring Hong Kong’s financial stability
According to Jiexhuang, Hong Kong’s authorities should make good use of the “one country, two systems” and first try including Bitcoin in ETFs before further exploring ways to increase Hong Kong’s Bitcoin holdings.
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Jiexhuang highlighted the potential of Bitcoin to attract talent and investment, while also reinforcing financial stability amid market fluctuations. He emphasized that holding Bitcoin as part of national reserves could mitigate disruptions caused by broader adoption in traditional markets, offering Hong Kong a first-mover advantage.
The report stated that Hong Kong’s Financial Services and the Treasury Bureau will formulate crypto regulations based on the “same business, same risks, same rules” philosophy.
“If major economic powers take the initiative to include Bitcoin in strategic reserves, the value of Bitcoin will be more stable, causing more and more other countries to follow suit and reduce their holdings of traditional assets,” Jiexhuang said. “This will result in the fall of the price of traditional assets and will shrink the government’s fiscal reserves holding traditional assets,” he added.
Hong Kong regulators bet big on Bitcoin
According to the report, China currently holds 190,000 Bitcoin through various confiscation efforts, making its Bitcoin reserve second only to that of the United States.
In Mid-2024, another Hong Kong Legislative Council member, Johnny Ng, announced plans to collaborate with various stakeholders to assess the feasibility and potential benefits of incorporating Bitcoin into the special administrative region’s financial reserves.
Source: Johnny Ng
Ng highlighted the increasing global awareness of Bitcoin, making it a crucial element in the discourse on digital assets and their integration into traditional financial systems.
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