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News

Hong Kong Bitcoin Reserve Proposed to Push Forward With Huge Economic Potential

December 30, 2024 - Around 3 mins mins to read

Key Points:

  • Hong Kong legislator Wu Jiezhuang has proposed integrating Bitcoin into the region’s fiscal reserves to enhance financial security.
  • According to Wu, the Hong Kong Bitcoin reserve could position the region as a leader in global finance.
A Hong Kong legislator has called for the inclusion of Bitcoin in the region’s fiscal reserves, taking advantage of China’s “one country, two systems” to bolster financial security.
Hong Kong Bitcoin Reserve Proposed to Push Forward With Huge Economic Potential

Read more: Hong Kong SFC Approved 4 New Crypto Trading Platforms

Hong Kong Bitcoin Reserve Gets Legislative Backing

Wu Jiezhuang, a legislator in Hong Kong’s Legislative Council, has tabled a bill to utilize the region’s foreign exchange funds to buy and hold Bitcoin and other digital assets for long-term benefits.

Wu counterpointed that limited supply, combined with increasing adoption, positions Bitcoin as a prospective competitor to traditional reserve assets, offering protection against inflation and diversified financial systems. He further commented on the volatility of cryptocurrencies but suggested a small percentage of reserves in Bitcoin would mitigate the risks while reaping the potential benefits.

The lawmaker referred to the global trend of the adoption of Bitcoin, citing examples like El Salvador and Bhutan, among small countries, and some U.S. states that have already included Bitcoin in their reserves. He also made allusions to the recent proposal by U.S. President-elect Donald Trump to make Bitcoin a strategic reserve asset- a development that promises to redefine conventional markets.

Wu went further and believed the Hong Kong Bitcoin reserve could give the region an edge in the world’s finance segment. He cited a series of advantages that the digital reserve provided, including lower costs of storage and transacting than traditional types like gold and silver.

Development of Digital Asset Integration for Hong Kong

Hong Kong has already moved to integrate digital assets into its financial ecosystem. The Hong Kong Stock Exchange offers ETFs linked to Bitcoin and Ethereum, among others, and the region has issued licenses for cryptocurrency trading platforms.

The Hong Kong Bitcoin reserve proposal follows another similar inquiry by legislator Johnny Ng into the potential of Bitcoin within regional reserves, made at the start of 2024. Meanwhile, Hong Kong’s Financial Services and the Treasury Bureau continued to work toward regulating cryptocurrencies under the guiding principle of “same business, same risks, same rules.

China, which holds the world’s second-largest Bitcoin reserves after the U.S., could serve as a model for Hong Kong’s exploration of cryptocurrency integration.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.