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Coinpaprika 2024-12-31 12:56:04

Hong Kong Lawmaker Proposes Adding Bitcoin to Fiscal Reserves for Financial Growth

A member of Hong Kong's legislative council, Wu Jiexhuang, has proposed including Bitcoin ( BTC ) in the region’s fiscal reserves. He believes this move could boost financial security, stimulate the local cryptocurrency industry, and attract more investment. Jiexhuang suggested that Hong Kong allocate part of its foreign exchange funds to acquire and hold BTC for the long term. He argued that incorporating BTC as a reserve asset could enhance Hong Kong's role as a global financial hub and increase revenue through transaction stamp taxes. By leveraging China’s one country, two systems framework , Hong Kong could take an early lead in the growing adoption of cryptocurrencies. He noted that if major economies begin adding Bitcoin to their strategic reserves, it would stabilize BTC’s value, encourage global adoption, and shift investment away from traditional assets. This, in turn, could lower the value of conventional reserves, reducing their attractiveness. Jiexhuang acknowledged the risks of investing in Bitcoin and recommended starting with a small allocation of fiscal reserves, focusing initially on Bitcoin exchange-traded funds (ETFs). He emphasized the importance of studying the U.S. spot Bitcoin ETF market’s impact on the financial industry before making significant moves. Hong Kong already has a spot Bitcoin ETF market , but its performance lags behind the U.S. market. This proposal aligns with a similar suggestion made earlier by legislative council member Johnny Ng in July 2024. Both lawmakers cited the potential benefits of following the U.S., where former President Donald Trump announced plans to create a national Bitcoin reserve during a Bitcoin conference in Nashville. Advocates believe Hong Kong’s adoption of BTC as a reserve asset could attract global talent and strengthen its position as a leader in financial innovation. Germany is also considering BTC adoption as a reserve asset, reflecting a growing global interest in cryptocurrencies as part of fiscal strategies.