Asia's Bitcoin Policy Watershed: Hong Kong ETF and Stablecoin Legislation Leading the National Reserve Game, What Will Happen to the Government's 460,000 BTC?

Bitcoin is becoming a core topic in Asia's financial strategy. Hong Kong is building a compliance market through the Spot ETF and stablecoin legislation, while China is reviewing the RMB stablecoin to promote cross-border trade, and Japan, South Korea, and Taiwan are fiercely debating the feasibility of national Bitcoin reserves. Governments around the world hold a total of 463,700 BTC (accounting for 2.3% of the total Bitcoin supply), with China having confiscated 195,000 coins in the PlusToken case. Policy differences will determine whether Asia can compete for global Bitcoin pricing power.

Hong Kong regulators: From peripheral speculation to financial infrastructure

On April 30, 2024, the Hong Kong Stock Exchange will list Asia's first Bitcoin and Ethereum Spot ETFs, allowing for physical subscriptions to reduce friction; on May 21, 2025, the "Stablecoin Act" will be passed to establish a fiat-pegged issuer licensing system. These two major initiatives will transform cryptocurrency from a speculative tool into a financial conduit:

• The Australian ETF allows pension funds to allocate legally.
• The South Korean "Virtual Asset User Protection Law" requires 80% cold storage and insurance.
• Indonesia's OJK will take over crypto regulation in January 2025 Hong Kong attracts custodians and audit firms to gather, forming a regional Compliance hub.

The Strategic Dilemma of Confiscating Bitcoin: Hold or Sell?

The government's Bitcoin inventory mainly comes from law enforcement seizures rather than active reserves, and the disposal method has caused market fluctuations:

• China’s PlusToken case confiscated 195,000 BTC, local disposal is chaotic and requires central coordination
• The United States chooses to retain confiscated Bitcoin, while Germany is selling off on a large scale.
• The UK CPS announced a record seizure in 2024 Governments around the world collectively hold 463,700 BTC, accounting for 2.3% of the circulating supply. The IMF currently prohibits the inclusion of cryptocurrencies in foreign exchange reserves, but signs of policy easing are emerging.

Politicization of National Reserves: Legislative Body Debates Bitcoin Allocation

Parliaments in multiple countries are promoting the legalization of Bitcoin reserves:

• Taiwanese legislator proposed to allocate 0.1% of GDP to establish a national Bitcoin reserve
• Japanese Diet questions the possibility of Bitcoin as a reserve asset (rejected by the Ministry of Finance)
• The Brazilian Chamber of Deputies 2025 hearing discusses a reserve allocation of up to 5% Bitcoin.
• Texas, USA, is the first to code recognition of state-level Bitcoin reserves. Political-driven rather than market-driven has become a new characteristic of the reserve debate.

Risk Warning: Policy misalignment may trigger significant market fluctuations.

• Government's unexpected selling may impact liquidity.
• Poor management of stablecoin reserves has led to a redemption crisis.
• Excessive regulation forces liquidity outflow
• Design flaws or amplified volatility in the US 401(k) pension crypto investment scheme. The Hong Kong Monetary Authority emphasizes: "The stablecoin bill establishes a licensing system for issuers to ensure financial stability." The South Korean FSC requires: "Virtual asset service providers must safely manage customer deposits and assets."

Key Pivot Points

(Bitcoin holdings of countries and governments | BiTBO)

• 2.3%: Government control of Bitcoin proportion
• 195,000: Number of Bitcoins seized in the PlusToken case
• 80%: South Korea cold storage mandatory ratio
• 2024.4.30: Hong Kong ETF Listing Date
• 2025.5.21: Hong Kong stablecoin bill passed

Conclusion

Asia is at a historical turning point in cryptocurrency policy: Hong Kong is seizing the institutional high ground with ETF and stablecoin legislation, China's decisions on asset confiscation and the digital RMB stablecoin will set the regional direction, while the political debate around national Bitcoin reserves continues to ferment. The integration of traditional financial infrastructure and blockchain is irreversible, but the lack of policy coordination among countries may lead to market fragmentation. Investors should pay attention to three major signals: China's central bank stablecoin policy, progress on the integration of cryptocurrencies in US pension funds, and the possibility of revising the IMF reserve framework, as these will determine whether Asia can leap from being a rule follower to a rule maker in the next cycle.