- A Hong Kong legislator proposed adding Bitcoin to national reserves for financial stability.
- The plan includes using Bitcoin ETFs to attract investment and reduce market risks.
A Hong Kong legislator has proposed leveraging the “one country, two systems” framework to incorporate Bitcoin into the region’s national reserves, emphasizing financial security and market stability. Wu Jiexhuang, a member of Hong Kong’s Legislative Council, outlined this vision during an interview with the state-owned newspaper Wen Wei Po.
Exploring Bitcoin’s Strategic Potential
Jiexhuang suggested that Hong Kong could evaluate the market impact of U.S.-based spot Bitcoin exchange-traded funds (ETFs) as a starting point. He referenced smaller nations, including El Salvador and Bhutan, which have integrated Bitcoin into their strategic reserves and noted its adoption by certain U.S. states.
The legislator also pointed to U.S. President-elect Donald Trump’s recent proposal to designate Bitcoin as a strategic reserve asset, arguing that such initiatives could significantly influence traditional markets. Jiexhuang highlighted the potential for Bitcoin to attract investment and talent to Hong Kong while mitigating disruptions caused by its growing adoption in mainstream markets.
Strategic Framework Under “One Country, Two Systems”
Jiexhuang proposed that Hong Kong capitalize on its unique position under the “one country, two systems” framework by initially including Bitcoin in ETFs. This approach would allow the region to assess Bitcoin’s market dynamics before increasing its holdings. He argued that incorporating Bitcoin into national reserves could offer a first-mover advantage and bolster financial resilience.
He further emphasized the potential global ripple effects if major economies adopt Bitcoin as a strategic reserve asset. According to Jiexhuang, such moves could stabilize Bitcoin’s value while prompting a decline in the prices of traditional assets, ultimately impacting fiscal reserves held in conventional financial instruments.
Growing Focus on Bitcoin in Hong Kong
Hong Kong’s Financial Services and the Treasury Bureau have committed to implementing crypto regulations under the principle of “same business, same risks, same rules.” These measures ensure a balanced approach to cryptocurrency integration within the region’s financial framework.
In mid-2024, another Legislative Council member, Johnny Ng, announced plans to collaborate with stakeholders to examine Bitcoin’s potential role in Hong Kong’s financial reserves. Ng highlighted growing global interest in Bitcoin, describing it as crucial in discussions surrounding digital asset adoption and traditional financial systems.
China’s existing Bitcoin reserves, currently the second-largest globally, underscore the cryptocurrency’s strategic importance. Jiexhuang’s proposal suggests that Hong Kong could further strengthen its financial position by embracing Bitcoin in a structured and pragmatic manner.
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