A recent report from a local media outlet has revealed that Hong Kong lawmaker Wu Jie is advocating for the integration of Bitcoin into the city-state’s fiscal reserves. Wu proposed that Hong Kong explore the inclusion of cryptocurrencies in its reserves and use foreign exchange funds to acquire and hold digital assets for the long term.
Highlighting the potential global impact of major economies incorporating Bitcoin into their reserves, Wu emphasized the limited supply of Bitcoin as a potential competitor to traditional assets and a hedge against inflation.
Despite acknowledging the volatility of Bitcoin, Wu suggested that governments and businesses allocate a small percentage of their reserves to the asset strategically, to benefit financial systems without undue risk exposure.
Furthermore, Wu pointed out that if influential countries adopt Bitcoin, its value could stabilize, leading to wider global acceptance. This shift could reduce reliance on traditional reserves like gold and silver, given Bitcoin’s lower storage and transaction costs.
Wu also noted the increasing presence of Bitcoin in mainstream finance, citing developments such as the Hong Kong Stock Exchange’s Bitcoin and Ethereum-linked ETFs and the issuance of licenses for crypto trading platforms.
This discussion follows a query from lawmaker Johnny Ng, who had raised the issue of digital asset integrations with the government.
China’s Recognition of Hong Kong’s Crypto Progress
In a related development, China’s central bank has recognized Hong Kong’s leadership in crypto regulation. In its 2024 Financial Stability Report, the People’s Bank of China commended Hong Kong’s efforts in managing and integrating digital assets.
The report highlighted Hong Kong’s proactive approach to exploring crypto licensing and the classification of virtual assets into securitized and non-securitized financial categories. This dual classification system ensures proper supervision and licensing for virtual asset trading platforms, particularly those dealing with security tokens.
Furthermore, institutions involved in virtual asset operations are required to obtain regulatory licenses before conducting business. Major financial institutions like HSBC and Standard Chartered are also mandated to include crypto asset exchanges in their customer oversight processes.
China’s acknowledgment underscores Hong Kong’s significant regulatory advancements in the crypto space. This year, Hong Kong has focused on regulating stablecoins and crypto exchanges, solidifying its position as a leader in Asia’s digital asset ecosystem.
The initial report was first covered by Wu Blockchain.