In the weekend that just ended, the most heated discussion was at the Bitcoin Conference held yesterday (28th). Former President Trump promised: "If elected as president, Bitcoin will be included in the US strategic reserve and will never be sold. ”. As soon as the news came out, many investors were excited, and they were even more optimistic that the value of Bitcoin might be comparable to or even surpass gold in the future.
Will the Hong Kong government also buy Bitcoin as reserves?
In this context, according to Hong Kong media reports , Fang Hongjin, co-chairman of the Hong Kong Blockchain Association, has recently suggested that the Hong Kong Government Exchange Fund continue to purchase and hold Bitcoin for the long term. In view of the expectation of Bitcoin’s long-term appreciation, it can bring benefits to Hong Kong’s finance. Come to the following benefits:
- Increase the diversification of Exchange Fund assets, enhance the anti-inflation properties of Exchange Fund assets, and increase the long-term stable appreciation expectations of foreign exchange assets;
- Get rid of dependence on a single dollar asset and enhance the autonomy of Hong Kong’s financial policy;
- Get out of the market as early as possible to buy Bitcoin, lay the foundation for Bitcoin holdings, and strive for the right to speak in the international Bitcoin market;
- Take advantage of the pledged financing characteristics of Bitcoin to facilitate short-term mortgage financing of US dollars to resist international hot money attacks on the Hong Kong linked exchange rate;
- To lay a financial credit guarantee for Hong Kong to become the international Web3.0 capital.
Bitcoin will become a trend as a reserve asset
Fang Hongjin also said that in view of the fact that the digital gold characteristics of Bitcoin are gradually recognized by international traditional finance, the adoption of Bitcoin as a reserve asset by the central banks of some countries will form a trend, citing El Salvador and the United States as examples:
In September 2021, El Salvador announced that it would position Bitcoin as an official currency-anchored asset, which has long been regarded as a laughing stock by the traditional financial community; and this year, conservative and steady Switzerland has also passed a bill to use Bitcoin as part of the reserve assets of the Swiss National Bank. configuration.
At the World Bitcoin Conference held in the United States last weekend, representatives from both the Republican and Democratic parties in the United States strongly expressed their intention to pass legislation to classify Bitcoin as a national strategic asset reserve. Republican candidate former President Trump released a contrast in his speech. The pursuit and support of Bitcoin is even more widespread.
Fang Hongjin predicted that once the United States officially includes Bitcoin as a national strategic reserve asset, many central banks will follow suit, and Bitcoin will soon be in short supply.
At the same time, Wu Jiezhuang, a member of the Hong Kong Legislative Council and a member of the National Committee of the Chinese People's Political Consultative Conference, also posted a long article on his X, arguing that including Bitcoin in Hong Kong's strategic financial reserves can be considered.
Regarding Bitcoin becoming the official financial reserve of a country or region, I think the current global awareness of Bitcoin is increasing, and Bitcoin is considered by the public to be "digital gold" in a technical context, so it can indeed be used in compliance situations in the future. Research and consider incorporating Bitcoin into strategic fiscal reserves.
Add "stability" and "autonomy" to Hong Kong's finance
On the other hand, Fang Hongjin pointed out that the main investment income of the Hong Kong Exchange Fund currently comes from U.S. debt. It was also because the U.S. Federal Reserve maintained high interest rates last year that the Hong Kong Exchange Fund achieved good returns. But if the Federal Reserve starts to cut interest rates and U.S. bond interest rates drop significantly, how should the Hong Kong Exchange Fund respond?
Fang Hongjin went on to say that due to the constraints of the linked exchange rate, Hong Kong's financial policy lacks independence and is forced to follow the U.S. Federal Reserve's monetary policy, unable to formulate financial policies suitable for the local area. Therefore, allocating a certain proportion of Bitcoin in the Hong Kong Exchange Fund and holding it for a long time can increase the stability and autonomy of Hong Kong's finance, and will also provide credit protection for Hong Kong, where the crypto industry gathers.
