Advocacy for Bitcoin Inclusion in Hong Kong’s Financial Strategy by Wu Jiezhuang
During a recent interview with the pro-Beijing publication Wen Wei Po, Wu Jiezhuang, a distinguished member of the Hong Kong Legislative Council and the National Committee of the Chinese People’s Political Consultative Conference, suggested the integration of Bitcoin into Hong Kong’s fiscal reserves. This notable proposal, unveiled on December 30, highlights the increasing interest in incorporating cryptocurrencies into governmental financial plans.
Perspectives from the Expert: Wu Jiezhuang
Wu Jiezhuang stressed that the notion of including Bitcoin in national reserves is not unprecedented, citing several smaller nations that have embraced Bitcoin as legal tender and certain U.S. states that have mandated allocating a portion of their reserves to cryptocurrency. He indicated that “If U.S. President-elect Donald Trump were to actively push for Bitcoin’s inclusion in government strategic reserves, it could have a ripple effect on traditional reserve assets globally.” Wu called on the Hong Kong Special Administrative Region (SAR) government to explore the possibility of incorporating digital assets into their financial strategies, proposing the use of the Exchange Fund for consistent Bitcoin acquisitions.
Cryptocurrency Landscape in Hong Kong
In response, Hong Kong’s Treasury Bureau clarified that its foreign exchange fund invests in a diversified range of assets to manage risk and achieve long-term growth. While cryptocurrencies are not officially recognized as investment targets, the Bureau acknowledged the potential involvement of external investment managers in limited cryptocurrency investments. The Bureau reiterated its commitment to regulating the crypto market based on the principle of “same business, same risk, same rules” to uphold financial stability and enhance the local virtual asset ecosystem.
Impact Assessment of U.S. Bitcoin Adoption
Expressing concerns, Wu Jiezhuang raised the alarm about potential repercussions if the United States were to formally acknowledge Bitcoin as a strategic reserve asset. He cautioned that such a move could disrupt conventional asset valuations and alter global investment patterns: “If major economic powers actively introduce Bitcoin into strategic reserves, its value would stabilize, prompting more countries to follow suit and potentially unsettling traditional assets.” He speculated that Bitcoin might surpass precious metals like gold and silver due to its lower storage and logistical costs, despite recognizing its lack of physical utility.
Noteworthy was Wu’s commentary on Bitcoin’s market progression, highlighting the emergence of 12 Bitcoin- and Ethereum-linked ETFs on the Hong Kong Stock Exchange and the issuance of seven trading licenses by the Hong Kong Securities Regulatory Commission. This development contrasts starkly with the skepticism surrounding Bitcoin’s viability a decade ago. However, he also noted Bitcoin’s challenges, particularly its price volatility and comparatively modest market capitalization when compared to gold, valued at around $20 trillion.
Concluding Remarks: A Conservative Stance on Cryptocurrency Investment
Encouraging caution, Wu urged governments and corporations to approach Bitcoin conservatively, recommending minimal allocation as fiscal assets to balance potential gains against associated risks. His plea for reassessing the role of digital assets in fiscal portfolios aligns with the increasing global interest in cryptocurrency, notably within the context of institutional investors’ growing acceptance. The dialogue poses vital questions about the future of traditional asset management as cryptocurrencies evolve, signaling a notable transformation in the financial realm. Presently, Bitcoin trades at $93,778, reflecting ongoing market volatility.
