Hong Kong lawmaker Johnny Ng has recently raised questions about whether the city’s government is considering Bitcoin as part of its investment strategy. In a statement made on Dec. 11, Ng pointed out the increasing global recognition of Bitcoin and its decentralized nature, despite the risks associated with it.
One of the main questions raised by Ng was whether the Hong Kong government might be looking into incorporating digital assets into its fiscal reserves. He also inquired about the possibility of the Exchange Fund, which is the investment arm of the Hong Kong Monetary Authority (HKMA), acquiring and holding Bitcoin for long-term strategic purposes. Ng further questioned whether the government had assessed the potential impact of other countries treating Bitcoin as a strategic reserve asset, particularly on Hong Kong’s economic stability and the Hong Kong dollar system.
Ng highlighted Hong Kong’s position as a leader in crypto innovation and called for a strategic approach to safeguard financial security while leveraging the city’s unique standing in the crypto sector.
In response to Ng’s queries, Joseph Chan, Acting Secretary for Financial Services and the Treasury, clarified that the Exchange Fund focuses on globally diversified assets to manage risk and optimize returns. While digital assets are not explicitly included in its portfolio, external fund managers may engage with them on occasion, although these investments remain minimal. As of Sept. 30, the Exchange Fund reported total assets of HK$4,133.9 billion (approximately $530 billion).
Chan acknowledged the increasing integration of virtual assets (VAs) into traditional finance and highlighted the potential benefits of blockchain technology, such as improved efficiency and transparency. However, he also pointed out the risks related to financial stability, money laundering, and investor protection.
Despite these risks, the government plans to maintain a balanced regulatory framework to mitigate them while fostering responsible innovation. This strategy aims to support Hong Kong’s position as a leading international financial hub. Chan emphasized the government and regulators’ commitment to formulating regulatory regimes that address risks under the principle of “same activities, same risks, same regulations,” creating an environment conducive to sustainable and responsible innovation.