Hong Kong Lawmaker Proposes Bitcoin Inclusion in Fiscal Reserves
A member of Hong Kong's legislative council, Wu Jiexhuang, proposed including Bitcoin (BTC) in the region’s fiscal reserves. He believes this could enhance financial security, stimulate the local cryptocurrency industry, and attract investment.
Jiexhuang suggested that Hong Kong allocate part of its foreign exchange funds to acquire and hold BTC long-term. He argued that incorporating BTC as a reserve asset could strengthen Hong Kong's status as a global financial hub and increase revenue through transaction stamp taxes. By leveraging China's one country, two systems framework, Hong Kong could lead in cryptocurrency adoption.
He noted that if major economies add Bitcoin to their strategic reserves, it would stabilize BTC’s value, promote global adoption, and shift investments from traditional assets, potentially lowering the value of conventional reserves.
Jiexhuang acknowledged the risks associated with Bitcoin and recommended starting with a small allocation of fiscal reserves, initially focusing on Bitcoin exchange-traded funds (ETFs). He emphasized studying the U.S. spot Bitcoin ETF market's impact on the financial industry before making substantial moves. Hong Kong already has a spot Bitcoin ETF market, but its performance lags behind that of the U.S. market.
This proposal aligns with a similar suggestion made by legislative council member Johnny Ng in July 2024. Both lawmakers highlighted potential benefits from following the U.S., where former President Donald Trump announced plans to establish a national Bitcoin reserve during a Bitcoin conference in Nashville.
Advocates believe that adopting BTC as a reserve asset could attract global talent and reinforce Hong Kong's position as a leader in financial innovation. Germany is also considering BTC adoption as a reserve asset, indicating a rising global interest in cryptocurrencies within fiscal strategies.