Key Takeaways
- He argued that Bitcoin’s limited supply and potential to hedge against inflation make it a viable addition to traditional reserves.
- He argued that if “influential countries” adopt Bitcoin, its value could stabilize over time, reducing reliance on traditional reserves
Hong Kong lawmaker Wu Jie has called on the government to explore incorporating Bitcoin into its fiscal reserves, a move he believes could strengthen the region’s financial stability and global competitiveness.
Speaking to local media, Wu emphasized the strategic importance of crypto, urging Hong Kong to leverage its “one country, two systems” framework to adopt Bitcoin as part of its financial strategy.
Wu’s proposal centres on allocating a small portion of Hong Kong’s fiscal reserves and foreign exchange funds to acquire and hold digital assets like Bitcoin. As per local media reports, he argued that Bitcoin’s limited supply and potential to hedge against inflation make it a viable addition to traditional reserves.
Acknowledging the asset’s volatility, Wu advised that only a small percentage of reserves be dedicated to such investments. “Strategic adoption could benefit financial systems without exposing them to unnecessary risk,” Wu stated.
The legislator also highlighted global trends, pointing to countries like El Salvador and Bhutan, which have integrated Bitcoin into their reserves. He drew attention to U.S. initiatives, including President-elect Donald Trump’s proposal to classify Bitcoin as a strategic reserve asset, to drive home his point.
The legislator further argued that if “influential countries” adopt Bitcoin, its value could stabilize over time, reducing reliance on traditional reserves like gold and silver. “Bitcoin’s lower storage and transaction costs offer a practical advantage over conventional assets,” he explained.
Wu acknowledged these challenges while advocating for reform. He pointed to the growing presence of Bitcoin in mainstream finance, citing Bitcoin and Ethereum-linked ETFs listed on the Hong Kong Stock Exchange.
Wu suggested that Hong Kong study the impact of U.S.-based Bitcoin ETFs as a preliminary step toward expanding its crypto holdings. He argued that such measures could attract talent and investment, enhancing the region’s competitiveness. “By acting early, Hong Kong could secure a competitive edge in the global financial landscape,” Wu said.
Hong Kong faces several challenges in positioning itself as a crypto-hub. Its strict crypto licensing framework has caused prominent exchanges like OKX and Bybit to withdraw its application to operate in Hong Kong. The current system restricts trading to highly liquid crypto like Bitcoin and Ethereum, while excluding smaller altcoins that often attract broader market participation.
Additionally, the regulatory requirement that virtual asset trading platforms exclude mainland Chinese users has further dampened enthusiasm, with critics claiming it undermines market confidence.
