Hong Kong legislator proposes adding BTC to the region’s fiscal reserves

Hong Kong could soon join the list of countries leveraging bitcoin (BTC) as a store of value and inflation hedge by establishing the cryptocurrency as a fiscal reserve asset.

According to a report According to local media Wen Wei Po, Wu Jiexhuang, a member of Hong Kong’s legislative council, has proposed adding BTC to the region’s fiscal reserves to improve financial security. He said Hong Kong could use foreign exchange funds to acquire and hold BTC in the long term.

BTC as a reserve asset in Hong Kong

Jiexhuang told Wen Wei Po that adding BTC to Hong Kong’s fiscal reserves could encourage the development of the local crypto industry, attract talent and investment, and increase transaction stamp duty revenue.

Leveraging China’s one-country, two-system policy, including BTC in Hong Kong reserves, could offer the region a first-mover advantage and help authorities reduce economic disruptions caused by broader adoption of the asset in traditional markets.

“If major economic powers take the initiative to include Bitcoin in strategic reserves, the value of Bitcoin will be more stable, causing more and more countries to follow suit and reduce their holdings of traditional assets. “This will result in a decline in the price of traditional assets and reduce the government’s fiscal reserves holding traditional assets,” Jiexhuang said.

While the politician highlighted the benefits of buying and holding BTC, he also pointed out the risks associated with investing in the asset. He advised Hong Kong authorities to allocate a small percentage of national reserves to the asset, starting with Bitcoin exchange-traded funds (ETFs). He urged the government to study the impact of the US Bitcoin ETF spot market on the country’s financial industry and act accordingly.

Notably, Hong Kong already has a Bitcoin ETF spot market; However, its inflows pale in comparison to US spot Bitcoin ETFs.

Following in Trump’s footsteps

Jiexhuang is not the first legislator to propose including BTC in Hong Kong reserves; Another member of the legislative council, Johnny Ng, followed suit in July 2024. Ng’s suggestion followed US President Donald Trump’s promise to create a national Bitcoin reserve at the Bitcoin Conference in Nashville earlier this year.

Both politicians believe that Trump’s proposal to create a strategic Bitcoin reserve for the United States could have a major impact on traditional markets and insist that Hong Kong could position itself as a financial center that promotes such technological advances.

Meanwhile, lawmakers in Germany are also proposing the adoption of BTC as the country’s reserve asset.