By CentBit.Online – Crypto & Blockchain Expert, Bangladesh
Hong Kong legislator Wu Jiexhuang has proposed leveraging the city’s “one country, two systems” framework to incorporate Bitcoin into its national reserves, aiming to enhance financial security and global competitiveness.
Proposal Highlights
Speaking to state-owned newspaper Wen Wei Po, Jiexhuang outlined his vision for Hong Kong to:
- Study Bitcoin ETFs: He emphasized assessing the impact of U.S.-based Bitcoin exchange-traded funds (ETFs) on the market as a preliminary step.
- Draw Global Comparisons: Jiexhuang highlighted nations like El Salvador and Bhutan, along with U.S. states, that have integrated Bitcoin into their financial systems.
- Classify Bitcoin Strategically: He referenced U.S. President-elect Donald Trump’s proposal to declare Bitcoin a strategic reserve asset.
Bitcoin ETFs: A Stepping Stone
Jiexhuang suggested that Hong Kong authorities:
- Start with Bitcoin ETFs as an initial move.
- Use ETFs to attract talent and investments while reinforcing financial stability.
- Transition to holding Bitcoin as a reserve asset, potentially stabilizing its value as global adoption grows.
“Including Bitcoin in reserves can reduce reliance on traditional assets and attract global investments,” Jiexhuang explained.
He argued that by adopting Bitcoin early, Hong Kong could gain a competitive edge in the global financial landscape.
Regulation and Strategy
Hong Kong’s Financial Services and the Treasury Bureau plans to regulate cryptocurrencies under the principle of “same business, same risks, same rules.”
China, which holds 190,000 Bitcoin through confiscations, ranks second globally in Bitcoin reserves. Despite China’s strict ban on crypto trading, Hong Kong is working to establish itself as a crypto-friendly hub within the broader framework.
Challenges: Hong Kong vs. Singapore
Hong Kong faces stiff competition from Singapore, which has outpaced it in crypto adoption:
- Singapore issued 13 crypto licenses in 2024 to firms like OKX, Upbit, and BitGo.
- Hong Kong granted only seven platform licenses, with restrictive rules limiting trading to highly liquid assets like Bitcoin and Ether.
These factors have driven prominent exchanges, such as OKX and Bybit, to withdraw their applications, citing regulatory hurdles and the ban on mainland Chinese users as significant barriers.
Legislative Criticism
Other Hong Kong lawmakers, including Johnny Ng, have voiced concerns about the rigidity of Hong Kong’s crypto licensing system. Critics argue that restrictive policies impact market confidence and hinder the city’s ability to attract blockchain and Web3 projects.
Conclusion
Wu Jiexhuang’s proposal highlights an opportunity for Hong Kong to cement its position as a global financial leader. However, balancing regulatory compliance with fostering innovation will be crucial.
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Tags: Hong Kong Bitcoin News, Crypto ETF Hong Kong, Blockchain Policy, CentBit Online Crypto, Bitcoin Reserve Proposals, Crypto Bangladesh
