Proposal to Integrate Bitcoin into Reserves
Hong Kong lawmaker Wu Jiezhuang has proposed incorporating Bitcoin (BTC) into the city’s fiscal reserves. He suggests leveraging the city’s investment fund to purchase and hold Bitcoin for the long term. The goal of this initiative is to boost the development of Hong Kong’s cryptocurrency industry, attract global investments and talent, and increase transaction-related revenue.
Strategy for Bitcoin Reserves
Wu, a member of Hong Kong’s Legislative Council and the chair of the Web3 Virtual Asset Development Subcommittee, highlighted the potential strategic benefits of utilizing Bitcoin. He noted that the global market is increasingly adopting Bitcoin, with some countries and U.S. states already including it in their reserves as a hedge against inflation and excessive currency issuance.
Wu also referenced the U.S. under President Trump, which positioned Bitcoin as a strategic reserve asset. This decision boosted Bitcoin’s market value and challenged traditional assets. According to Wu, Hong Kong should capitalize on its unique "one country, two systems" framework to enhance financial security and diversify its reserves.
Risks and Potential Benefits
While Wu acknowledged Bitcoin’s volatility and cybersecurity risks, he argued that including BTC in fiscal reserves, even in a limited capacity, could yield positive outcomes. He emphasized Bitcoin’s growing adoption, the development of derivative markets, and its increasing integration into mainstream finance, which he believes could benefit Hong Kong’s economy and attract further investments.
Proposal for a Bitcoin-Based ETF
Wu also proposed creating a Bitcoin-based ETF to unlock the value of existing holdings. This move could make Hong Kong more appealing as a hub for cryptocurrencies and digital assets.
Conclusion
The proposal to integrate Bitcoin into Hong Kong’s fiscal reserves could be a pivotal step in advancing the region’s cryptocurrency ecosystem. Despite the risks associated with BTC’s volatility, Wu believes its adoption could bring long-term benefits to Hong Kong.
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