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

Hong Kong might quickly be part of the record of nations leveraging bitcoin (BTC) as a retailer of worth and a hedge in opposition to inflation by establishing the cryptocurrency as a fiscal reserve asset.

In line 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 may use international trade funds to amass and maintain BTC in the long run.

BTC as Reserve Asset in Hong Kong

Jiexhuang instructed Wen Wei Po that including BTC to Hong Kong’s fiscal reserves may encourage the event of the native crypto business, 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, may supply the area a first-mover benefit and assist authorities scale back financial disruptions attributable to 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 likely be extra steady, inflicting increasingly more different nations to observe swimsuit and scale 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 review the impression of america’ spot Bitcoin ETF market on the nation’s finance business and act accordingly.

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

Following Trump’s Steps

Jiexhuang shouldn’t be 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 consider Trump’s proposal to create a strategic Bitcoin reserve for america may have a serious impression on conventional markets and demand Hong Kong may very well 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.