Johnny Ng, an elected member of the Hong Kong Legislative Council, recently suggested that the state Exchange Fund could invest in crypto. Joseph Chan, Acting Secretary for Financial Services and the Treasury, did not directly approve the idea but seemed surprisingly open to it.
The council member focused his proposal on the potential monetary gains of crypto investment, and Chan acknowledged that Hong Kong may make minor investments in the future.
A Possible Crypto Thaw in Hong Kong
This news comes from local media reporting and a transcript of Ng’s proposal and response. In recent months, Hong Kong has been growing as a potential crypto hub, approving a Bitcoin ETF earlier this year.
In November, the Hong Kong Exchanges and Clearing (HKEX) also launched a crypto index. Unfortunately, unlike the spot Bitcoin ETFs in the US, the crypto ETFs in HKEX haven’t been a major success.
Council member Johny Ng has constantly attempted to advocate for pro-crypto policies in Hong Kong. In July, for example, he advocated for a Bitcoin Reserve in Hong Kong, explicitly mirroring Trump’s proposal in the US. Today, his proposal centered around cryptocurrency as a high-performing investment option.
“It has been reported that financial enterprises around the world have increased their investment in digital assets one after another, with the price of bitcoins, hailed as ‘digital gold,’ rocketing in tandem since this year, and the development of the global currencies will move toward digitalization,” Ng began.
Subsequently, he asked whether the government had plans to improve regulations or appoint a commission to study crypto’s market potential. He also proposed the benefits of including digital assets and cryptocurrencies in its fiscal reserves.”
Joseph Chan, Acting Secretary for Financial Services and the Treasury, dictated an official response. His stances were very conciliatory to the industry, claiming that crypto “is bringing new opportunities for innovation… to the financial system,” and pointed out that it’s becoming well-integrated into global finance institutions.
“While crypto-assets are not the target assets of the Exchange Fund, the external managers also invest in diversified asset classes and markets around the world. It cannot be ruled out that there may be investments involving crypto during investment operations… at different points of time, but the relevant proportion is minimal,” Secretary Chan stated.
Compared to some of the previous hostility in Hong Kong, this is a very encouraging response. Chan only mentioned anti-crypto tropes such as its potential crime applications in passing, and explicitly acknowledged that crypto is growing on the world stage. This echoes a November ruling from China’s High Court, which directly affirmed legal uses of cryptocurrency.
Despite China’s notorious Bitcoin ban, there are a few signs of a possible thaw. At the BRICS Summit in October, China’s delegates endorsed crypto and blockchain-based solutions for an international de-dollarization effort.
Although these pieces of news are a far cry from total acceptance, the needle is definitely moving toward a positive future for crypto in this region.
