China’s Hong Kong Legislator Proposes Adding Bitcoin to National Reserves

The Bitcoin National Reserves Proposal has taken center stage in Hong Kong’s financial discourse as legislators push for Bitcoin to become a part of the region’s strategic reserves. The bold initiative seeks to harness the unique one country, two systems framework, positioning Bitcoin as a tool to bolster financial stability and attract global investments.

Speaking to state-owned Wen Wei Po, Wu Jiexhuang, a member of Hong Kong’s Legislative Council, highlighted the need for Hong Kong to lead in exploring Bitcoin’s potential impact on financial markets.

Bitcoin National Reserves Proposal: Learning from Global Leaders

Wu Jiexhuang’s Bitcoin National Reserves Proposal draws inspiration from smaller nations like El Salvador and Bhutan, which have integrated Bitcoin into their reserves. He also noted U.S. President-elect Donald Trump’s suggestion of including Bitcoin as a strategic reserve asset.

If major economic powers include Bitcoin in their reserves, its value will stabilize, encouraging other countries to follow suit and reduce their holdings of traditional assets, Jiexhuang stated.

The proposal underscores Bitcoin’s growing role in global financial strategies, showcasing its ability to act as a hedge against market volatility and a means of attracting talent and investment.

Hong Kong’s unique political and economic framework provides an excellent opportunity to pioneer innovative financial policies. Jiexhuang emphasized that Bitcoin’s inclusion in national reserves could offer Hong Kong a first-mover advantage in navigating the evolving digital economy.

Under the Bitcoin National Reserves Proposal, the initial step involves incorporating Bitcoin into exchange-traded funds (ETFs) as a low-risk approach to studying its market impact. Jiexhuang believes this strategy will enable Hong Kong to gradually expand its Bitcoin holdings while mitigating risks.

Hong Kong must proactively adapt to the digital financial revolution to remain competitive globally, he explained.

The Financial Services and Treasury Bureau of Hong Kong has been tasked with crafting crypto regulations based on the philosophy of same business, same risks, same rules. This regulatory consistency ensures that businesses and investors have clear guidelines for navigating the crypto market.

Jiexhuang also noted China’s influence in maintaining Hong Kong’s financial stability. Currently, China holds 190,000 Bitcoin through various confiscation efforts, making it the second-largest Bitcoin reserve holder globally.

China’s support offers Hong Kong the foundation to explore Bitcoin integration without compromising financial stability, he said.

Johnny Ng, another Hong Kong legislator, has echoed support for the Bitcoin National Reserves Proposal. Ng announced plans to collaborate with stakeholders to assess the feasibility of incorporating Bitcoin into Hong Kong’s reserves.

Bitcoin’s increasing global awareness makes it a critical element in discussions on integrating digital assets into traditional financial systems, Ng explained.

By leveraging Bitcoin, Hong Kong aims to attract global investors, reinforce economic resilience, and position itself as a leader in digital finance.

The Global Implications of Bitcoin National Reserves Proposal

Jiexhuang pointed out that major economies integrating Bitcoin into their reserves could disrupt traditional asset markets. This shift could lead to the depreciation of traditional assets, shrinking government fiscal reserves, he warned.

However, he believes the long-term benefits outweigh these challenges. By adopting Bitcoin early, Hong Kong could secure a leadership role in the digital financial space, setting a precedent for other economies.

While the Bitcoin National Reserves Proposal presents promising opportunities, it also poses challenges. The volatility of Bitcoin and its integration into traditional reserves requires careful management.

Hong Kong’s legislators remain confident. If Hong Kong pioneers Bitcoin as a reserve asset, it can mitigate disruptions caused by broader market adoption and showcase its adaptability in a rapidly evolving global economy, Jiexhuang said.

The Bitcoin National Reserves Proposal is more than a financial strategy—it’s a vision for Hong Kong’s future as a leader in digital finance. By taking calculated steps to integrate Bitcoin, the region can attract investments, bolster financial stability, and set a global precedent.

As the world watches Hong Kong’s bold initiative, the success of this proposal could reshape how nations view Bitcoin’s role in their financial systems, making it a cornerstone of economic resilience in the digital age. Get more from The Bit Gazette