Hong Kong’s Bitcoin Reserve Plans

Hong Kong legislator Wu Jiezhuang has suggested integrating Bitcoin (BTC) into the city’s fiscal reserves. He proposed using the Exchange Fund to purchase and hold Bitcoin long-term to stimulate the development of Hong Kong’s cryptocurrency industry, attract global funds and talent, and increase transaction stamp tax revenue.

Wu, a member of the Legislative Council and chairman of the Web3 Virtual Asset Development Subcommittee, highlighted the advantages of leveraging Bitcoin amid its growing global adoption. In a recent interview, he noted that the U.S., under President-elect Trump, has positioned Bitcoin as a strategic government reserve asset, leading to a surge in market value and challenging traditional assets.

He argued that Hong Kong should utilize its unique “one country, two systems” framework to explore Bitcoin’s potential for enhancing financial security and diversifying reserve assets. Wu pointed out that many other countries, and even some U.S. states, have begun incorporating Bitcoin into their reserves, citing BTC as a hedge against inflation and excessive currency issuance.

While acknowledging Bitcoin’s volatility and cybersecurity risks, Wu advocated for BTC’s inclusion in government reserves in a limited capacity. He emphasized Bitcoin’s growing adoption, derivatives market, and increasing integration into mainstream finance, believing this could benefit Hong Kong’s economy and attract investment. Wu also suggested the creation of Bitcoin-based ETFs to activate the value of existing holdings.