Wu Jiexhuang, a member of the Legislative Council, believes Hong Kong could use its policy “one country,two systems” to include Bitcoin as part of its national reserve.
The legislator told Wen Wei Po of the local media that Bitcoin has the ability to bring foreign talent and investments to the Special Administrative Region, while at the same time strengthening the financial stability in the region.
Jiexhuang mentioned efforts made by small countries like El Salvador or Bhutan who have integrated the cryptocurrency flagship into their reserve.
The incoming US President Donald Trump has pledged to turn Bitcoin into a reserve currency.
Jiexhuang is of the opinion that such actions by economic giants could stabilize Bitcoin’s value and encourage other countries to reduce their dependence on traditional assets.
The traditional sector could be affected, “reducing the fiscal reserve of the government that holds traditional assets,” he said.
He also compared Bitcoin to precious metals such as gold or silver in terms of storage. Bitcoin, according to him, could become a more attractive reserve asset with time due its lower logistics and storage costs.
Jiexhuang urges Hong Kong, therefore, to take advantage of the first mover’s advantage and explore including Bitcoin as early reserves in the hopes it will mitigate any disruptions that may be caused by global adoption.
The legislator did acknowledge the risk associated with Bitcoin, and suggested that Bitcoin should only make up a tiny portion of reserves.
He proposed leveraging Hong Kong’s unique position as “one country, Two Systems” to drive these efforts.
Hong Kong has greater flexibility in terms of financial regulation and financial strategy. It can experiment with new financial methods, such as the integration of Bitcoins into reserves without directly affecting mainland China’s policies.
Hong Kong, he concluded, should closely monitor the developments in America and take a conservative approach.
If it’s observed that U.S. Bitcoin reserves continue to grow, Hong Kong should consider carefully holding an equivalent amount in its reserve.
Wen Wei Po states that China has a substantial amount of Bitcoin. According to Wen Wei Po, its holdings currently stand at 190.000. The country is now the second-largest Bitcoin holder after the US.
Bitcoin reserve movement grows strong
The calls to create Bitcoin reserves amongst policymakers have increased around the globe, particularly since Bitcoin reached $100,000 this month.
Christian Lindner, the former German finance minister, called on Germany’s central banks to accept cryptocurrencies such as Bitcoins for use as reserve assets. This follows similar calls made by MP Joana Côtar earlier in the year.
Sarah Knafo, a French parliament member who spoke on December 17, said that European countries should begin to consider building a Bitcoin reserve at the national level and concentrate their efforts on developing crypto mining.
Slawomir Mentezen, a presidential candidate and Polish Minister who ran for office last month in Poland, promised to establish a Bitcoin Reserve and implement crypto-friendly regulations if elected by 2025.
As new information becomes available, this post Hong Kong Calls for Creation of Bitcoin National Reserve may be updated.
