Fang Hongjin, Co-Chairman of the Hong Kong Blockchain Association, has proposed that the Hong Kong government should consider purchasing and holding Bitcoin as part of its foreign exchange reserves. This strategic move aims to diversify the assets of the foreign exchange fund, enhance its resistance to inflation, and reduce dependence on the US dollar. By acquiring Bitcoin early, Hong Kong can establish its influence in the international market and leverage its collateral financing features to counter potential speculative attacks on the Hong Kong dollar peg.

Fang emphasizes that this initiative aligns with Hong Kong's ambition to become a global Web3.0 hub by providing financial credibility. He notes that Bitcoin's status as digital gold is increasingly recognized by the traditional financial sector worldwide. Several central banks might follow the trend of adopting Bitcoin as a reserve asset, as seen in El Salvador's declaration of Bitcoin as an official currency anchor and Switzerland's legislation to include Bitcoin in its national bank reserves. The United States might also consider Bitcoin as a strategic national asset, driving demand from central banks and traditional financial institutions.

Fang believes that Bitcoin has the potential to become a mainstream international financial asset, comparable to or even surpassing gold. With a current market value of approximately $1.4 trillion, Bitcoin's price could soar to nearly $600,000 if it reaches the market value of gold. Therefore, allocating a certain proportion of Bitcoin in Hong Kong's foreign exchange reserves and holding it long-term could enhance the stability and autonomy of Hong Kong's financial system.

By investing in Bitcoin, Hong Kong can reduce its reliance on traditional assets and mitigate potential risks associated with inflation and currency fluctuations. This strategic move can also position Hong Kong as a forward-thinking and innovative financial hub, attracting investments and talent in the Web3.0 space.

Fang's proposal highlights the growing recognition of Bitcoin's potential as a store of value and a hedge against inflation. As central banks and traditional financial institutions increasingly adopt Bitcoin, its market value and influence are likely to grow. By investing in Bitcoin, Hong Kong can stay ahead of the curve and establish itself as a leader in the global financial landscape.