Hong Kong lawmaker Wu Jie has recently proposed the integration of Bitcoin into the city-state’s fiscal reserves. In a report, Wu suggested that the Hong Kong Special Administrative Region (SAR) should explore the inclusion of cryptocurrencies in its fiscal reserves and utilize foreign exchange funds to acquire and hold digital assets for the long term.
Wu emphasized the global implications of major economies incorporating Bitcoin into their reserves. He argued that Bitcoin’s limited supply could position it as a competitor to traditional assets and provide protection against inflation. Despite acknowledging Bitcoin’s volatility, Wu recommended that governments and businesses allocate a small percentage of their reserves to the digital asset strategically, to benefit financial systems without unnecessary risk exposure.
Furthermore, Wu highlighted the potential stabilization of Bitcoin’s value if influential countries adopt it, leading to wider global acceptance. This shift could reduce reliance on traditional reserves like gold and silver, as Bitcoin’s lower storage and transaction costs offer practical advantages.
The lawmaker also noted Bitcoin’s increasing presence in mainstream finance, citing Hong Kong Stock Exchange’s Bitcoin and Ethereum-linked ETFs and the licensing of crypto trading platforms.
In a related development, China’s central bank has recognized Hong Kong’s progress in crypto regulation. In its 2024 Financial Stability Report, the People’s Bank of China praised Hong Kong for its advancements in managing and integrating digital assets.
According to Chinese authorities, Hong Kong has actively explored crypto licensing and has categorized virtual assets under securitized and non-securitized financial assets. This dual classification system ensures proper supervision and licensing for virtual asset trading platforms, especially for security tokens.
Additionally, institutions involved in virtual asset operations must obtain regulatory licenses before conducting activities. Major financial institutions like HSBC and Standard Chartered are required to include crypto asset exchanges in their routine customer oversight processes.
China’s acknowledgment underscores Hong Kong’s significant regulatory progress. This year, Hong Kong has focused on regulating stablecoins and crypto exchanges, solidifying its leadership in Asia’s digital asset ecosystem.
The story was first reported by Wu Blockchain.