Hong Kong legislator mulls Bitcoin strategic reserve research, seeks China’s support for pilot applications

Hong Kong politician Johnny Ng Kit-chong is calling for lawmakers in the special administrative jurisdiction to follow the footsteps of the US in researching the feasibility of a federal Bitcoin reserve, with the help of Mainland China.

In a February 5 X post, the Chinese People’s Political Consultative Conference (CPPCC) member acknowledged that both the US and China see crypto as a battleground for innovation and technology that can help “stimulate the sluggish global economy.”

Ng pointed to recent developments in the US, where Crypto and artificial intelligence czar David Sacks held a press conference on Tuesday with Republican lawmakers to discuss the use of digital currencies in the American federal government.

Hong Kong should speed up research on Bitcoin strategic reserve

According to Ng, the formation of a bicameral working group in the US Congress to develop cryptocurrency regulations signals a growing bipartisan consensus on the importance of digital assets.

“Development of cryptocurrency is one of the biggest consensuses in the entire political arena after the new US government came to power,” he remarked.

He believes that Hong Kong preceded America when it comes to implementing measures that foster crypto adoption, including the formation of a White House Interagency Cryptocurrency Task Force, which he equated to HK’s 2023 Third Generation Internet Development Task Force.

The politician is requesting policymakers to use its already established crypto regulatory framework to accelerate research into Bitcoin’s feasibility as a strategic reserve in Hong Kong for the region not to “fall behind again.”

Johnny Ng: Use stablecoins to improve international trade.

In his post, Ng called for the rapid approval and issuance of stablecoins through the region’s regulatory sandbox and suggested using Hong Kong’s “centric” position within the Greater Bay Area in Mainland China to test stablecoin applications for cross-border trade. 

He also proposed loosening restrictions on licensed virtual asset trading platforms to attract more participants and recommended the establishment of a dedicated office to drive innovation in artificial intelligence and virtual assets.

Concluding his sentiments, the Hong Kong Legislative Councilor revealed that he has been invited to the Bitcoin US Summit in May, where he plans to engage with industry experts in Las Vegas, to strengthen ties between Eastern and Western crypto sectors.

Hong Kong to boost SFC digital asset oversight numbers 

Ng’s push for crypto expansion comes as Hong Kong’s Securities and Futures Commission (SFC) moves to strengthen its oversight of the digital asset industry. According to a budget plan presented to the Legislative Council on February 3, the SFC is increasing its headcount to double down on crypto regulation.

The financial regulator, which has kept its staffing levels largely unchanged for three of the past five years, plans to add 15 positions, eight of which will be dedicated to monitoring and enforcing virtual asset regulations. The budget proposal cited the need for enhanced market surveillance and enforcement to stay ahead in the global technology market.

However, this expansion comes at a time when Hong Kong is grappling with a projected budget deficit of HK$100 million ($13 million) for the year. The South China Morning Post reported that budget cuts are likely to be announced later this month, raising questions about the financial sustainability of the SFC’s increased regulatory efforts.

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