Hong Kong could become a trailblazer in Bitcoin adoption as a national reserve asset, leveraging its unique position under China’s “one country, two systems” policy. Wu Jiezhuang, a member of Hong Kong’s Legislative Council, has called for a strategic approach to integrating Bitcoin into the city’s financial framework to ensure financial security and attract global investment.
Inspiration from Global Trends
Wu highlighted the examples of smaller nations like El Salvador and Bhutan, which have incorporated Bitcoin into their strategic reserves, alongside several U.S. states exploring similar moves. He also pointed to U.S. President-elect Donald Trump’s proposal to classify Bitcoin as a strategic reserve asset, emphasizing its potential impact on global financial markets.
Wu suggested Hong Kong could analyze the market influence of U.S.-based spot Bitcoin exchange-traded funds (ETFs) as a precursor to Bitcoin adoption. “The inclusion of Bitcoin in strategic reserves by major economies could stabilize its value, prompting other countries to follow suit and shift away from traditional assets,” Wu told *Wen Wei Po*, a state-backed publication.
A Strategic Advantage for Hong Kong
By leveraging its semi-autonomous status, Wu argued that Hong Kong could integrate Bitcoin into ETFs as an initial step before expanding its Bitcoin holdings. He emphasized the cryptocurrency’s ability to attract talent and investment while bolstering financial stability amid global market fluctuations.
“Bitcoin in national reserves could mitigate disruptions caused by broader adoption in traditional markets, granting Hong Kong a first-mover advantage,” Wu said.
The report also noted that Hong Kong’s Financial Services and the Treasury Bureau is actively crafting crypto regulations under the “same business, same risks, same rules” principle. This framework aims to ensure a level playing field while fostering innovation in the burgeoning digital asset space.
China’s Existing Bitcoin Reserves
China’s existing Bitcoin reserves, totaling 190,000 BTC acquired through various confiscation efforts, position it as the second-largest holder globally, trailing only the United States. Wu believes Hong Kong could complement this reserve strategy by embracing Bitcoin on its own terms, benefiting from its unique governance model.
Wu’s proposal comes on the heels of similar initiatives in mid-2024 when fellow Legislative Council member Johnny Ng announced plans to collaborate with stakeholders to explore Bitcoin’s potential role in Hong Kong’s financial reserves.
