Hong Kong Legislative Council member Johnny Ng recently suggested that the national foreign exchange fund could invest in cryptocurrencies. The Secretary for Financial Services and the Treasury, Chan Ho-lam, did not directly endorse the idea, but seemed unexpectedly open to it.
Source: Coin Radar
The council member focused his proposal on the potential monetary gains from crypto investments, and Chan acknowledged that Hong Kong may make small investments in the future.
The potential thawing of cryptocurrencies in Hong Kong
The news comes from local media reports as well as the transcripts of Ng's proposals and responses. In recent months, Hong Kong has been growing as a potential cryptocurrency hub, having approved a Bitcoin ETF earlier this year.
In November, the Hong Kong Stock Exchange (HKEX) also launched a crypto index. Unfortunately, unlike the US spot Bitcoin ETF, the Hong Kong Stock Exchange's crypto ETF has not achieved significant success.
Council member Johny Ng has been advocating for supportive cryptocurrency policies in Hong Kong. For instance, in July, he advocated for establishing Bitcoin reserves in Hong Kong, clearly reflecting Trump's proposal in the US. Today, his proposal focuses on cryptocurrencies as a high-performance investment option.
“Reports indicate that financial enterprises worldwide are increasing their investments in digital assets. Since the beginning of this year, the price of Bitcoin, hailed as 'digital gold', has surged, and the development of global currencies is moving towards digitalization,” Ng began.
He subsequently asked the government whether there are plans to improve regulations or appoint a committee to study the market potential of cryptocurrencies. He also proposed the benefits of incorporating digital assets and cryptocurrencies into its fiscal reserves.
The Secretary for Financial Services and the Treasury, Joseph Chan, articulated the official response. His stance is very moderate towards the industry, claiming that cryptocurrencies “are bringing new innovative opportunities... to the financial system,” and pointed out that it is integrating well into global financial institutions.
“Although cryptocurrencies are not the target asset of the foreign exchange fund, external managers also invest in diversified asset classes and markets around the world. It cannot be excluded that there may be investments involving cryptocurrencies in investment operations... but the relevant proportion is negligible.”
Compared to some previous hostility in Hong Kong, this is a very encouraging response. Chan casually mentioned anti-crypto metaphors, such as its potential criminal applications, and explicitly acknowledged that cryptocurrencies are developing on the world stage. This echoes a November ruling from China's Supreme Court, which directly affirmed the legitimate uses of cryptocurrencies.
Despite China's infamous ban on Bitcoin, there are still some signs that Bitcoin may thaw. At the BRICS summit in October, the Chinese representative supported solutions based on cryptocurrencies and blockchain to promote international de-dollarization efforts.
Although this news is far from full acceptance, the positive future of cryptocurrencies in the region is undoubtedly heading towards brightness.
