Hong Kong is considering a bold move: integrating $BTC into national financial reserves. This proposal aims not only to boost the cryptocurrency industry but also to create incentives to attract investment, talent, and increase tax revenue from digital asset transactions.



Bitcoin: The Future of National Reserves?



According to Mr. Wu Jiezhong, Chairman of the Web3 Committee of the Hong Kong Legislative Council, this idea is not new. Countries like #ElSalvador have successfully used Bitcoin as legal tender and a reserve asset. In the United States, states like Ohio, Texas, and Pennsylvania are also considering a similar strategy.



Mr. Wu emphasized:



“Hong Kong needs to leverage the One Country, Two Systems model to experiment with Bitcoin as a reserve asset.”



With flexibility in financial management and policies different from mainland China, #HongKong has the potential to become a pioneering hub for cryptocurrency in Asia.



Hong Kong's Strategic Advantage



Hong Kong can play a bridging role, leveraging the advantages of Bitcoin to:


• Develop financial products such as crypto ETFs.


• Support China in optimizing the over 194,000 BTC reserves it holds.


• Maintain its position as the leading cryptocurrency hub in the region.



According to Mr. Changpeng Zhao, former CEO of Binance, Bitcoin is increasingly recognized as a tool for protecting long-term economic interests.



Considerations for Limitations



Despite the clear potential, Bitcoin still faces many challenges:


1. High volatility: The value of Bitcoin can change dramatically within a few days, creating risks for reserve funds.


2. Small market capitalization: The market capitalization of Bitcoin (~$2 trillion) is still modest compared to gold (~$20 trillion).



However, Mr. Wu believes:



“With a limited supply of 21 million BTC, Bitcoin could become an effective inflation hedge, gradually replacing part of the role of gold and silver.”



Hong Kong's Actions Over the Past Year



Hong Kong has shown strong support for the cryptocurrency industry through:


• Reduce taxes and license more crypto exchanges.


• Implement a pilot program for stablecoin management.


• Propose increasing tax incentives for private funds.



Conclusion



The proposal to include Bitcoin in the national reserves could be a strategic move to strengthen Hong Kong's position in the cryptocurrency industry. While there are still many challenges, with a long-term vision and flexible management mechanisms, Hong Kong can fully leverage this opportunity to become the world's leading digital financial center.