Hong Kong lawmaker Wu Jie has urged the city-state’s government to consider integrating Bitcoin into its fiscal reserves, a local media outlet reported.
The report showed that Wu proposed that the Hong Kong Special Administrative Region (SAR) explore the inclusion of cryptocurrencies in its fiscal reserves and leverage foreign exchange funds to acquire and hold digital assets over the long term.
The lawmaker highlighted the global implications of major economies incorporating Bitcoin into their reserves. Wu argued that Bitcoin’s limited supply might position it as a competitor to traditional assets while offering protection against inflation.
While acknowledging Bitcoin’s volatility, Wu advised that governments and businesses allocate only a small percentage of their reserves to the asset. He emphasized that strategic adoption could benefit financial systems without exposing them to unnecessary risk.
Moreover, if “influential” countries adopt Bitcoin, its value will stabilize to an extent that prompts wider acceptance globally. This shift might reduce reliance on traditional reserves like gold and silver, as Bitcoin’s lower storage and transaction costs present a practical advantage, he explained.
Wu also noted Bitcoin’s growing presence in mainstream finance, citing the Hong Kong Stock Exchange’s Bitcoin and Ethereum-linked ETFs and the issuance of licenses for crypto trading platforms.
This discussion builds on a query from lawmaker Johnny Ng, who had asked the government to consider digital asset integrations.
China’s recognizes Hong Kong’s crypto progress
Meanwhile, China’s central bank has acknowledged that Hong Kong has emerged as a leader in crypto regulation.
In its 2024 Financial Stability Report, the People’s Bank of China praised Hong Kong’s advancements in managing and integrating digital assets.
According to the authorities, Hong Kong has actively explored crypto licensing and categorized virtual assets under securitized and non-securitized financial assets. This dual classification system ensures proper supervision and licensing for virtual asset trading platforms, particularly for security tokens.
Moreover, institutions engaged in virtual asset operations must obtain regulatory licenses before commencing activities. Additionally, large financial institutions like HSBC and Standard Chartered must include crypto asset exchanges in their routine customer oversight processes.
China’s acknowledgment highlights Hong Kong’s significant strides in regulatory developments. This year, Hong Kong prioritized regulating stablecoins and crypto exchanges, which has helped cement its leadership in Asia’s digital asset ecosystem.
Wu Blockchain first reported the story.