Exploring Alternative Investment Options for Fiscal Reserves: A Proposal for Incorporating Bitcoin
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Hong Kong Lawmaker Proposes Incorporating BTC Into Region’s Fiscal Reserves
Wu Jiexhuang, a member of the Hong Kong legislative council, has proposed incorporating bitcoin (BTC) into the region’s fiscal reserves to enhance financial security and promote the development of the local crypto industry. According to Wen Wei Po, Wu believes that by leveraging foreign exchange funds to acquire and hold BTC in the long term, Hong Kong could increase its financial resilience and improve the overall economic stability.
Incorporating BTC into the fiscal reserves would also attract talent and investment, boost transaction stamp tax revenue, and allow the government to diversify its reserves. Furthermore, Wu highlights that by being an early adopter, Hong Kong would have a first-mover advantage, reducing the potential disruptions caused by widespread adoption in traditional markets.
Wu emphasized the benefits of buying and holding BTC, however, he also cautioned against the risks associated with investing in the asset. He advised allocating a small percentage of national reserves to the asset, starting with Bitcoin exchange-traded funds (ETFs). Additionally, Wu urged the government to study the impact of the United States’ spot Bitcoin ETF market on the finance industry and act accordingly.
This proposal follows the footsteps of US President Donald Trump’s vow to create a national Bitcoin reserve at the Bitcoin Conference in Nashville earlier this year. Another legislative council member, Johnny Ng, has also proposed the same idea in July 2024.
The concept is not new as lawmakers in Germany have been proposing the adoption of BTC as the country’s reserve asset.
The potential move could lead to significant implications for the global economy and cryptocurrency markets, especially considering the influence Hong Kong holds as a major financial hub.
Source: cryptopotato.com
