Hong Kong considers Bitcoin in reserves to help reduce its significant fiscal deficit.
Bitcoin’s volatility and smaller market size present challenges for government adoption.
Bitcoin’s low transaction costs could make it a better alternative to gold for diversification.
Hong Kong legislator Johnny Ng has a new idea to help address the region’s financial deficit: include Bitcoin in the city’s foreign exchange (FX) reserves, citing sources from local media.
As the chairman of the Subcommittee on Issues Relating to the Development of Web3 and Virtual Assets, Ng stated that the current fiscal deficit, which surpasses 100 billion yuan ($13.7 billion), could be eased with a substantial amount of Bitcoin.
He added that holding a Bitcoin reserve could help preserve value, but only a larger allocation would lead to fiscal benefits.
Global Trends and Bitcoin as a Reserve Asset
Ng’s suggestion aligns with broader global trends. Smaller nations have already embraced Bitcoin as a reserve asset, using it as legal tender. Financial analyst Wu Jiezhuang pointed out that several U.S. states have legalized allocating some of their reserves to Bitcoin, helping to div…
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