Politician and businessman Wu Jiezhuang, a member of the Hong Kong Legislative Council and the National Committee of the Chinese People's Political Consultative Conference, has called for the inclusion of bitcoin in the city's fiscal reserves. The proposal came up during an interview. published by the pro-Beijing newspaper Wen Wei Po, founded in Hong Kong on September 9, 1948.
Legislator suggests adding bitcoin to fiscal reserves
Wu Jiezhuang's comments, presented in a special issue dated December 30, emphasize that “including bitcoin in national financial reserves is not a new idea,” highlighting the fact that several smaller countries have already adopted btc as legal currency. . Wu further noted: “Some US states have also legislated for 10% of their reserves to be in bitcoin, allowing for a more diversified asset allocation.”
He added that if US President-elect Donald Trump were to “aggressively promote the inclusion of bitcoin in the government's strategic reserves,” it would have a global impact, especially on traditional reserve assets. Wu used this context to urge the Hong Kong Special Administrative Region (SAR) government to consider “incorporating digital assets and cryptocurrencies into financial reserves,” including the possibility of using the Exchange Fund for continued btc purchases. in the long term.
Responding to these calls, the SAR Government Treasury Office confirmed that the Hong Kong foreign exchange fund invests in “a globally diversified asset class and markets to spread risk and enhance long-term returns.” While cryptocurrency is not formally designated as a target investment for the currency fund, the Bureau acknowledged that “externally contracted investment managers also invest in globally diversified asset classes and markets,” allowing for potential, albeit minimal, investments. related to cryptocurrencies.
Regarding financial security, the Bureau reiterated Hong Kong's stance on regulating the cryptocurrency market based on the principle of “same business, same risk, same rules.” This approach aims to mitigate risks and ensure that financial security is maintained, while the government continues to “improve the regulatory system and launch measures to promote the development of the local virtual asset market.”
Wu Jiezhuang expressed concern about the broader ramifications if the United States were to recognize btc as a strategic reserve asset. He suggested that such a move could destabilize traditional assets: “If economic powers actively add bitcoin to their strategic reserves, its value will stabilize, causing more countries to follow suit and reduce their holdings of traditional assets, causing Traditional asset prices fall and government finances are reduced. reserves.”
Wu posited that btc could eventually replace “precious metals with low practical utility, including gold and silver,” due to its lower storage and transportation costs. While he mentioned that bitcoin itself lacks physical utility, he argued that the cryptocurrency's ease of transfer and storage gives it an advantage in market compensation, especially compared to the substantial storage and logistics expenses of gold.
Wu underlined bitcoin's growing presence in the market, referencing the fact that 12 bitcoin and ethereum-linked ETFs are currently trading on the Hong Kong Stock Exchange, while the Hong Kong Securities Regulatory Commission has issued 7 licenses. of commercial platforms. This growth stands in stark contrast to a decade ago, when only a small cohort believed in bitcoin's potential. However, Wu also noted that “price volatility and a relatively small market value” constitute weaknesses: “With each bitcoin valued at $100,000, the total market value of bitcoin is about $2 trillion, far from world value of gold of about 20 trillion dollars.”
He further explained that bitcoin is “not without risk,” citing both its dramatic price fluctuations and the opaque identities behind wallet addresses. Consequently, Wu advises governments and companies to maintain a cautious approach, allocating only a minimal portion of bitcoin “as tax assets” to balance risk and return.
Notably, already in July this year, another member of the Hong Kong Legislative Council, Johnny Ng, announced plans to evaluate the inclusion of bitcoin in the financial reserves of the special administrative region.
At the time of publication, btc was trading at $93,778.
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