The Hong Kong politician Wu Jiezhuang has advocated for the inclusion of Bitcoin (BTC) in the city’s currency stocks as part of the Bitcoin Government Reserves Strategy, proposing that the Exchange Fund acquire and maintain Bitcoin for an extended period.
He has also suggested including Bitcoin in the city’s currency stocks and using the Exchange Fund to buy Bitcoin. This strategy aims to broaden the scope of the Bitcoin company in Hong Kong and attract financial resources and skilled individuals from all over the world. It will also increase the money collected through transaction stamp duties.
Hong Kong’s Bitcoin
Wu, a member of Hong Kong’s Legislative Council and the head of the Web3 Virtual Asset Development Subcommittee, talked about Bitcoin’s possible benefits at a time when it is becoming more accepted worldwide. A few weeks ago, he talked about how the U.S. strategically adopted Bitcoin under President-elect Trump, which caused Bitcoin’s market value to skyrocket. He said adding Bitcoin to government funds could make traditional investments less secure. This would allow Hong Kong to use its unique “one country, two systems” method to improve financial security.
Bitcoin for Inflation Defense
According to Wu, many countries and states in the United States have started to hold Bitcoin in their savings accounts as a defensive mechanism against inflation and excessive money creation. This measure has been taken in response to current economic conditions. These countries and states have taken steps like this. This action aims to protect oneself from the repercussions of each of these factors. This proactive method, which may be termed a proactive step generally, has been undertaken by these countries and national governments so that they may prevent potential problems.
He thought that Hong Kong would be able to accomplish its objective of constructing a more stable financial system if it implemented a plan similar to the one described here. This plan would include diversifying its reserve assets and transforming Bitcoin into a long-term investment. To be more exact, it would consider both of these elements.
Bitcoin in Government Reserves
Even though Wu accepted the volatility of Bitcoin and the problems related to cybersecurity, he urged for the cautious inclusion of Bitcoin in government reserves. He also acknowledged the reality that Bitcoin is a cryptocurrency. Specifically, he remarked that the increasing popularity of Bitcoin, the growth of its derivatives market, and its growing engagement in mainstream finance might potentially significantly benefit Hong Kong’s economy by attracting investment and talent. He is referring to the fact that the Bitcoin market is expanding.
Related: Bitcoin ETF Net Inflows Hit $475 Million December 2024
Summary
The Bitcoin Government Reserves Strategy is at the core of Wu Jiezhuang’s plan to help the cryptocurrency business in Hong Kong. He advocates for Bitcoin to be added to the Chinese city’s money supply. By adopting a Bitcoin Government Reserves Strategy, Hong Kong can capitalize on Bitcoin’s expanding significance in global markets. It could strengthen its financial security and increase the investment it receives.
It could also grow its reserve assets. Hong Kong can achieve these benefits if it embraces this plan. However, fluctuations in price and internet security concerns pose dangers. Wu highlights the potential long-term economic advantages of utilizing digital assets in the city’s money strategy. The city might realize these gains in the long run.
