Wu Jie is of the opinion that Hong Kong’s strategic transition to Bitcoin integration has the potential to entice innovative businesses and strengthen its economic resilience.
A local media outlet has reported that Hong Kong lawmaker Wu Jie has encouraged the city-state’s government to contemplate the integration of Bitcoin into its fiscal reserves.
According to the report, Wu suggested that the Hong Kong Special Administrative Region (SAR) investigate the possibility of incorporating cryptocurrencies into its fiscal reserves and utilizing foreign exchange funds to acquire and maintain digital assets in the long term.
The lawmaker emphasized the global implications of major economies incorporating Bitcoin into their reserves. Wu contended that Bitcoin’s restricted supply could serve as a competitor to conventional assets while simultaneously providing protection against inflation.
Wu recommended that governments and businesses designate only a small percentage of their reserves to the asset, despite acknowledging Bitcoin’s volatility. His emphasis was on the potential advantages of strategic adoption for financial systems, without subjecting them to unnecessary risk.
Furthermore, Bitcoin’s value will stabilize to an extent that encourages its global adoption if “influential” countries adopt it. He explained that this change could potentially reduce dependence on conventional reserves such as gold and silver, as Bitcoin’s reduced storage and transaction costs offer a practical advantage.
Wu also observed the increasing prominence of Bitcoin in mainstream finance, citing the issuance of licenses for crypto trading platforms and the Hong Kong Stock Exchange’s Bitcoin and Ethereum-linked ETFs.
This conversation is a continuation of a request from lawmaker Johnny Ng, who requested that the government take into account the integration of digital assets.
In the interim, the central bank of China has recognized that Hong Kong has become a forerunner in the regulation of cryptocurrency.
The People’s Bank of China commended Hong Kong’s progress in the management and integration of digital assets in its 2024 Financial Stability Report.
Hong Kong has been actively investigating crypto licensing and has classified virtual assets as either securitized or non-securitized financial assets, according to the authorities. Particularly for security tokens, this dual classification system guarantees appropriate supervision and licensing for virtual asset trading platforms.
Additionally, institutions that are involved in virtual asset operations are required to obtain regulatory licenses prior to commencing operations. Furthermore, it is imperative that substantial financial institutions, such as Standard Chartered and HSBC, incorporate crypto asset exchanges into their standard customer supervision procedures.
China’s recognition underscores Hong Kong’s substantial progress in regulatory reform. This year, Hong Kong has prioritized the regulation of stablecoins and crypto exchanges, which has contributed to its establishment as a leader in Asia’s digital asset ecosystem.
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