Hong Kong Lawmaker Proposes Incorporating BTC Into Region’s Fiscal Reserves

Hong Kong could quickly be part of the listing of nations leveraging bitcoin (BTC) as a retailer of worth and a hedge towards inflation by establishing the cryptocurrency as a fiscal reserve asset.

In keeping with a report from native media, Wen Wei Po, Wu Jiexhuang, a member of the Hong Kong legislative council, has proposed incorporating BTC into the area’s fiscal reserves to boost monetary safety. He stated Hong Kong might use overseas change funds to amass and maintain BTC in the long run.

BTC as Reserve Asset in Hong Kong

Jiexhuang advised Wen Wei Po that including BTC to Hong Kong’s fiscal reserves might encourage the event of the native crypto trade, entice expertise and funding, and improve transaction stamp tax income.

Benefiting from China’s one nation, two programs coverage, together with BTC in Hong Kong’s reserves, might provide the area a first-mover benefit and assist authorities cut back financial disruptions brought on by broader adoption of the asset in conventional markets.

“If main financial powers take the initiative to incorporate Bitcoin in strategic reserves, the worth of Bitcoin will probably be extra steady, inflicting an increasing number of different international locations to observe go well with and cut back their holdings of conventional belongings. This can consequence within the fall of the value of conventional belongings and can shrink the federal government’s fiscal reserves holding conventional belongings,” Jiexhuang stated.

Whereas the politician famous the advantages of shopping for and holding BTC, he additionally famous the dangers related to investing within the asset. He suggested Hong Kong authorities to allocate a small proportion of the nationwide reserves to the asset, beginning with Bitcoin exchange-traded funds (ETFs). He urged the federal government to check the influence of the USA’ spot Bitcoin ETF market on the nation’s finance trade and act accordingly.

Notably, Hong Kong already has a spot Bitcoin ETF market; nonetheless, its inflows are pale compared to U.S. spot Bitcoin ETFs.

Following Trump’s Steps

Jiexhuang is just not the primary lawmaker to suggest together with BTC in Hong Kong’s reserves; one other legislative council member, Johnny Ng, did the identical in July 2024. Ng’s suggestion adopted U.S. President Donald Trump’s vow to create a nationwide Bitcoin reserve on the Bitcoin Convention in Nashville earlier this 12 months.

Each politicians imagine Trump’s proposal to create a strategic Bitcoin reserve for the USA might have a significant influence on conventional markets and demand Hong Kong might be positioned as a monetary hub selling such technological developments.

In the meantime, lawmakers in Germany are additionally proposing the adoption of BTC because the nation’s reserve asset.