Hong Kong Legislator Proposes Adding Bitcoin to National Reserves

In a move that could potentially shape the future of financial stability in Hong Kong, Wu Jiexhuang, a member of the Legislative Council, is advocating for the inclusion of Bitcoin in the special administrative region’s national reserve. According to an interview with state-owned newspaper Wen Wei Po, Jiexhuang believes that Hong Kong can leverage China’s ‘one country, two systems’ policy to explore this possibility.

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Market Impact of US-Based Spot Bitcoin ETFs

Jiexhuang points out that smaller nations such as El Salvador and Bhutan have successfully integrated Bitcoin into their strategic reserves. He also notes that certain US states are exploring similar opportunities. The legislator suggests that Hong Kong authorities should study the market impact of United States-based spot Bitcoin exchange-traded funds (ETFs) before further exploring ways to increase Hong Kong’s Bitcoin holdings.

China’s Role in Ensuring Hong Kong’s Financial Stability

Jiexhuang emphasizes that China plays a crucial role in ensuring Hong Kong’s financial stability. He believes that the special administrative region should make good use of the ‘one country, two systems’ policy and first try including Bitcoin in ETFs before further exploring ways to increase Hong Kong’s Bitcoin holdings.

Potential Benefits of Holding Bitcoin as Part of National Reserves

Jiexhuang highlights the potential benefits of holding Bitcoin as part of national reserves. He believes that this move could attract talent and investment while reinforcing financial stability amid market fluctuations. Additionally, he suggests that holding Bitcoin could mitigate disruptions caused by broader adoption in traditional markets, offering Hong Kong a first-mover advantage.

Crypto Regulations in Hong Kong

The report notes that Hong Kong’s Financial Services and the Treasury Bureau will formulate crypto regulations based on the ‘same business, same risks, same rules’ philosophy. Jiexhuang emphasizes that if major economic powers take the initiative to include Bitcoin in strategic reserves, the value of Bitcoin will be more stable, causing more countries to follow suit and reduce their holdings of traditional assets.

Consequences of Increased Adoption of Digital Assets

Jiexhuang’s statement suggests that increased adoption of digital assets could lead to a decline in the price of traditional assets. This, in turn, would result in a shrinkage of government fiscal reserves holding traditional assets. He believes that this is a consequence of the decreasing demand for traditional assets and increasing awareness of digital assets.

Hong Kong Regulators’ Interest in Bitcoin

According to the report, China currently holds 190,000 Bitcoin through various confiscation efforts, making its Bitcoin reserve second only to that of the United States. This shows that regulators are taking a keen interest in Bitcoin and exploring ways to incorporate it into their financial systems.

Collaborative Efforts Towards Incorporating Bitcoin

In Mid-2024, another Hong Kong Legislative Council member, Johnny Ng, announced plans to collaborate with various stakeholders to assess the feasibility and potential benefits of incorporating Bitcoin into the special administrative region’s financial reserves. This move demonstrates the growing interest in exploring the potential of digital assets.

Global Awareness of Digital Assets

Ng highlighted the increasing global awareness of Bitcoin, making it a crucial element in the discourse on digital assets and their integration into traditional financial systems. As more countries explore the possibilities of digital assets, Hong Kong is well-positioned to take advantage of this trend and establish itself as a leader in this space.

The Role of Story Protocol in the Discourse on Digital Assets

In an effort to help creators survive the onslaught of AI, Story Protocol has introduced ‘programmable IP’ crypto. This innovative solution offers a way for creatives to maintain control over their digital assets while still benefiting from the increasing awareness and adoption of these assets.

Conclusion

The inclusion of Bitcoin in Hong Kong’s national reserve is an exciting development that could potentially shape the future of financial stability in the special administrative region. With China’s support and interest in exploring the potential of digital assets, Hong Kong is well-positioned to take advantage of this trend and establish itself as a leader in the space.

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