Exploring Bitcoin Integration in Hong Kong’s Investment Strategy
Hong Kong lawmaker Johnny Ng recently raised questions about whether the city’s government is considering Bitcoin as part of its investment strategy. In a statement on Dec. 11, he emphasized the global recognition of Bitcoin and its decentralized nature, despite the risks involved.
The Bitcoin Reserve Inquiry
Ng specifically questioned if the Hong Kong government is open to integrating digital assets into its fiscal reserves. He also inquired about the possibility of the Exchange Fund, the investment arm of the Hong Kong Monetary Authority (HKMA), acquiring and holding Bitcoin for long-term strategic purposes.
Additionally, Ng raised concerns about the potential impact of other countries treating Bitcoin as a strategic reserve asset on Hong Kong’s economic stability and the Hong Kong dollar system. He asked whether the government had evaluated and studied this impact.
Advancing Crypto Innovation in Hong Kong
Ng highlighted Hong Kong’s advantage as a leader in crypto innovation and urged for a strategic approach to safeguard financial security while leveraging the city’s unique position in the crypto sector.
Government’s Stance
Joseph Chan, Acting Secretary for Financial Services and the Treasury, clarified that the Exchange Fund focuses on globally diversified assets to manage risk and optimize returns. While digital assets are not explicitly included in its portfolio, external fund managers may engage with them occasionally, albeit in minimal investments.
As of Sept. 30, the Exchange Fund reported total assets of approximately $530 billion. Chan acknowledged the increasing integration of virtual assets (VAs) into traditional finance and highlighted the potential benefits of blockchain technology, such as enhanced efficiency and transparency. However, he also pointed out risks related to financial stability, money laundering, and investor protection.
The government plans to maintain a balanced regulatory framework to address these risks while supporting responsible innovation. This approach aims to uphold Hong Kong’s position as a leading international financial hub. Chan emphasized the importance of creating a facilitative environment for sustainable and responsible innovation through appropriate regulatory regimes.
