Hong Kong legislator Wu Jiexhuang suggested the region should start adding Bitcoin to its national reserves as a way to boost financial security.
According to the local newspaper Wen Wei Po, Wu said Hong Kong regulators should study the impact of U.S-issued Bitcoin exchange-traded funds on the market as a starting point before they decide to add Bitcoin to the national reserve.
He argued that Hong Kong authorities could take advantage of of China’s “one country, two systems” policy to include Bitcoin (BTC) in its national reserve for financial security. The newspaper noted that China currently holds the second largest Bitcoin reserve, worth 190,000 BTC from illegal trade confiscations.
“If major economic powers take the initiative to include Bitcoin in strategic reserves, the value of Bitcoin will be more stable, causing more countries to follow suit and minimize their traditional asset holdings,” said Wu.
The Council Member and Chairman of the Web3 Subcommittee on Virtual Asset Development did not recommend holding onto “small currencies.” Instead, he specifically recommended Bitcoin due to its high trading volume on the market, making it a more desirable asset compared to more traditional commodities like gold and silver.
He mentioned El Salvador and Bhutan as examples of regions that have successfully added Bitcoin to their national reserves, as well as several U.S. states.
In his interview with the news outlet, Wu pointed out that cryptocurrency is already integrated into Hong Kong’s financial institutions. For example, he mentioned there are already as many as 12 Bitcoin and Ethereum ETFs listed on the Hong Kong Stock Exchange. Moreover, the Hong Kong Monetary Authority has been known to invest in a “small portion” of cryptocurrency to diversify its assets.
Wu believes that Bitcoin will be beneficial for preserving Hong Kong’s financial security. In testing the waters, he suggested that regulators apply the principle of “same business, same risk, same rules” when it comes to holding crypto assets within the national reserves.
In the past few months, lawmakers in Japan, Russia and even the EU have made calls for governments to adopt Bitcoin in their national reserves. Although some countries have outright rejected the idea, others remain open to the possibility. The U.S. in particular have been leading the trend, though even some are doubtful it will happen.
As previously reported by crypto.news on Dec. 11, another Hong Kong lawmaker named Johnny Ng also brought up the topic of adding cryptocurrencies to Hong Kong’s fiscal reserves. Though, Secretary for Financial Services and the Treasury, Joseph Chan responded by saying that crypto assets were not the target investment for Hong Kong’s Exchange Fund.
