In the global financial market, every move of Bitcoin can attract widespread attention. Recently, with the election of Trump as president and his proposal to include Bitcoin in the national strategic reserves, the popularity of Bitcoin has skyrocketed. Legislators from countries like Japan and Russia are also actively pushing to include Bitcoin in national reserves, suggesting that a global competition for Bitcoin reserves is emerging. Against this backdrop, the Bitcoin worth hundreds of billions held by China has become a focal point of market attention. Although these Bitcoins mainly come from the mainland's crackdown on the virtual currency market or confiscation during law enforcement, how to deal with these 'hot potatoes' has become a significant challenge. Many experts in Hong Kong have come up with innovative suggestions, proposing that the mainland hand over these Bitcoins to Hong Kong to stimulate the Hong Kong stock market and achieve a 'two birds with one stone' effect. Is this proposal really feasible? How does Zhao Changpeng, a big player in the cryptocurrency world, view this issue?
The hype around Bitcoin continues to heat up.
Recently, Bitcoin's price has surged, breaking through the historic high of $108,000, becoming the focus of attention in the global financial market. This round of Bitcoin hype is not only related to the scarcity and decentralization of Bitcoin itself but also relies heavily on the active promotion by governments around the world. Trump's proposal to include Bitcoin in national strategic reserves undoubtedly injects strong momentum into Bitcoin's rise. Additionally, the active promotion by lawmakers from countries like Japan and Russia has also made more Western countries see the potential of Bitcoin reserves.
Among governments worldwide, the United States is undoubtedly the leader in Bitcoin reserves. According to data from CoinGecko, the United States holds over 210,000 Bitcoins with a market value exceeding $20 billion. China closely follows with 190,000 Bitcoins, constituting a significant reserve. Although these Bitcoins mainly come from the mainland's crackdown on the virtual currency market or confiscation during law enforcement, their value cannot be ignored. It is estimated that the market value of these Bitcoins exceeds $17.8 billion, which is equivalent to 130 billion RMB.
China's path to Bitcoin reserves is fraught with challenges.
Despite Bitcoin's immense value, the road for China to incorporate it into national reserves is fraught with challenges. As early as 2017, the People's Bank of China and six other departments issued a notice on preventing risks from token issuance and financing, explicitly prohibiting any organization or individual from illegally engaging in token issuance and financing activities. This notice undoubtedly dampened the development of Bitcoin and other cryptocurrencies in China. Therefore, in the short term, including Bitcoin in national reserves seems unrealistic.
However, Zhao Changpeng, a well-known figure in the cryptocurrency community and founder of Binance, expressed a different view during a recent speech. He believes that Bitcoin, as 'digital gold,' is becoming increasingly popular among investors due to its scarcity and decentralized characteristics. Zhao Changpeng contends that a Bitcoin reserve strategy is not only an effective means of combating inflation but also an important way to enhance national financial security. He predicts that although China's position in the cryptocurrency field is uncertain, the trend of establishing Bitcoin reserves is 'inevitable.'
Zhao Changpeng's perspective undoubtedly gives a boost to those who are optimistic about Bitcoin reserves. However, for mainland China, how to handle the existing Bitcoin reserves is a thorny issue. While these Bitcoins are incredibly valuable, their legality remains unclear in mainland China, making it a challenge to activate these assets.
Can Hong Kong become a testing ground for 'digital gold'?
In this context, Hong Kong, as a special administrative region under 'one country, two systems,' is attracting attention for its exploration of virtual asset applications and development. Many Hong Kong experts are beginning to consider whether Hong Kong can leverage its first-mover advantage and unique resource conditions in the cryptocurrency field to explore ways to activate the Bitcoin it holds.
Hong Kong Legislative Council member and chairman of the Web3 Virtual Asset Development Committee, Wu Jiezhang, recently stated that Hong Kong needs to study how to maintain national financial security in the face of the United States stirring the waters of Bitcoin and influencing traditional asset markets. He suggested that Hong Kong should fully leverage the advantages of 'one country, two systems' and 'try first' to include Bitcoin in the foreign exchange fund assets, exploring ways for the country to activate the Bitcoins it holds.
Wu Jiezhang's proposal has received considerable support from industry insiders. They believe that incorporating Bitcoin into the national fiscal reserves is not a new idea, as some small countries are already doing so, even making it legal tender. Some states in the United States have also legislated to require that 10% of state reserves be in Bitcoin to achieve asset diversification. Considering that the United States is the largest economy in the world and has a high level of participation in the global financial market, if Trump strongly promotes Bitcoin's inclusion in government strategic reserve assets, it will undoubtedly have a significant impact on the global market, especially on reserve assets.
Against this backdrop, some experts have come up with innovative ideas, suggesting that the mainland could consider transferring these Bitcoins to the Hong Kong SAR government to support Hong Kong in becoming a center for digital assets and cryptocurrencies. This approach would not only fully release the value of Bitcoin but also leverage Hong Kong's first-mover advantage and unique resource conditions in the cryptocurrency field to promote the development of the virtual asset market in Hong Kong.
Another industry insider from Hong Kong has put forward more specific suggestions. They pointed out that Hong Kong's approach to handling the official holdings during the 'big crocodile' incident could serve as a reference, namely establishing a similar fund to manage these Bitcoins. Specifically, fund companies and asset management companies could be invited to bundle the held Bitcoins into an exchange-traded fund (ETF) and then list it on the Hong Kong Stock Exchange. This initiative could fully release the value of the Bitcoins held in mainland China while also stimulating overall trading in the Hong Kong stock market, achieving a 'two birds with one stone' effect.
As a hot topic in the global financial market, the future development of Bitcoin is full of uncertainty. However, for China, how to manage the existing Bitcoin reserves is a pressing issue. Hong Kong, as a special administrative region under 'one country, two systems,' has unique advantages in the application and development of virtual assets. If the mainland's Bitcoin reserves could be handed over to Hong Kong for management, it could not only fully release the value of these assets but also promote the development of the virtual asset market in Hong Kong, achieving a win-win situation. Of course, the implementation of this proposal still needs to overcome many difficulties and challenges, but as long as we maintain an open mind and innovative thinking, we believe we can find the best solution.