Fang Hongjin: Hong Kong's Exchange Fund is advised to continuously purchase and hold bitcoin for the long term

Hong Kong Blockchain Association Co-Chairman Mr. Fang Hongjin recently said that he suggested that the Hong Kong government's Exchange Fund should continuously purchase and hold Bitcoin for a long period of time, in order to enhance the diversification of the Exchange Fund's assets and resistance to inflation, to get rid of its dependence on a single US dollar asset, and to enhance the autonomy of its financial policy. At the same time, early purchase of Bitcoin can establish the discourse power in the international market and utilize the pledge financing feature of Bitcoin to cope with international lobbyists' attacks on Hong Kong's linked exchange rate. In addition, this initiative will provide financial credit protection for Hong Kong's bid to become the international Web 3.0 capital. Fang Hongjin noted that Bitcoin's characteristics as digital gold have gradually been accepted by the international traditional financial industry, and many central banks may follow the trend of adopting Bitcoin as a reserve asset. For example, El Salvador announced in 2021 that it would use bitcoin as an official monetary anchor asset, while Switzerland has passed a bill to include bitcoin as a reserve asset for its national bank. The U.S. is also likely to include Bitcoin as a strategic national asset reserve, which will further drive demand for Bitcoin from central banks and traditional financial institutions. According to Fang Hongjin, Bitcoin is expected to become a mainstream international financial asset comparable to or even surpassing gold. Currently, Bitcoin's market capitalization is about US$1.4 trillion, and if its market capitalization reaches the level of gold, the price of a Bitcoin will soar from the current US$68,000 to nearly US$600,000. Therefore, allocating a certain percentage of bitcoin in the Hong Kong Exchange Fund and holding it for a long period of time can add leverage to Hong Kong's financial stability and autonomy.