Hong Kong’s lawmakers have proposed including Bitcoin as a fiscal reserve. According to the official announcement, made earlier today on 30th December, they have suggested adding Bitcoin to the city’s fiscal reserves and exploring using the Exchange Fund to buy and hold it for an extended period of time.
The move comes against the backdrop of Hong Kong aiming at becoming a crypto hub in Asia. The move aligns with other measures taken by Hong Kong in order to keep Bitcoin as a prime measure in its financial policy.
Hong Kong Plans On Keeping Bitcoin in Fiscal Reserve
The move is aimed towards encouraging the growth of the cryptocurrency industry in Hong Kong, draw in capital and talent, and increase transaction stamp tax revenue.
Additionally, the paper makes the case that Bitcoin has the biggest influence on the price of precious metals like silver and gold. Despite its lack of useful features, Bitcoin’s portability and ease of storage make it a potential replacement for conventional precious metals.
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Hong Kong Aims At Becoming Asia’s Crypto Hub
Hong Kong’s current moves align with the city trying to establish itself as a hub in Asia. Just previously, Hong Kong’s regulator had said that more cryptocurrency exchanges will be permitted to operate there.
Additionally, the Hong Kong government had published a stablecoin bill in the gazette, bringing the proposed regulatory regime one step closer to becoming law.
This move is part of an effort to advance its agenda on virtual assets while striking a balance between consumer protection and financial stability.
Hong Kong’s Changing Crypto Industry
With a global rise in crypto adoption, Hong Kong has also shifted its perspective towards digital assets. With investors drawn to the city’s increasing liquidity as well as the incentives and regulations offered by an active regulator, Hong Kong has quickly developed into a global hub for the issuing and trading of digital assets.
The industry’s innovation has led to the success of cryptocurrency spot and futures exchange-traded funds (ETFs) as well as the issuing of the first blockchain-based, multi-currency green bond in history. After a stablecoin sandbox was established earlier this year, the market is now expecting more digital products to be released.
The purpose of this strategic move is to put up a “favorable environment” that will attract asset managers to locate in the region.
One of the main factors that asset managers consider when choosing where to do business is taxation, which is the focus of Hong Kong’s new strategy.
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