Hong Kong's Position on Bitcoin Salaries and Mortgage Regulations

Understanding Bitcoin Salaries in Hong Kong

As cryptocurrencies gain popularity globally, the discussion around Bitcoin salaries has increased. However, in Hong Kong, the scenario is quite different. According to reports from PANews, while some employees abroad are paid in Bitcoin, this practice is not widespread in Hong Kong due to legal constraints.

The Legal Framework Surrounding Wages

Hong Kong's Employment Ordinance stipulates that wages must be paid in legal tender. Unfortunately, cryptocurrencies like Bitcoin are not recognized as legal currency in the region. Therefore, paying salaries in Bitcoin could likely contravene the law. Some tech companies, however, have found a workaround by offering Bitcoin as a bonus or incentive, which presents fewer legal challenges.

Bitcoin and Mortgage Applications

When it comes to mortgages, Bitcoin's instability poses significant challenges. While financial institutions often treat bonuses as part of a borrower's income—averaging them over two years to calculate the debt-to-income ratio (DTI)—Bitcoin does not fall into this category due to its status as a non-legal tender.

Bank Policies on Cryptocurrency

Currently, banks in Hong Kong only recognize traditional forms of income such as salaries, bonuses, and commissions paid in legal currency. Consequently, even if employees receive Bitcoin bonuses, this cryptocurrency cannot be considered for DTI calculation. Relevant forms of income include:

• Cash
• Stocks
• Foreign currency
• Properties in Hong Kong
• Funds and bonds
• Some insurance policies without premiums

Converting Bitcoin for Mortgage Use

For those wishing to leverage their cryptocurrency as part of a mortgage application, converting Bitcoin to cash is essential. This allows individuals to utilize the converted funds as a down payment, or to meet the asset requirements laid out by banks, which could facilitate loans of up to 70% of the property value.

Bank Requirements for Converted Funds

When converting cryptocurrency into cash for mortgage applications, banks may impose specific requirements. Some institutions require:

• Funds to be held in the applicant's account for at least three months.
• Submission of bank statements verifying the legitimacy of the funds.

If these statements indicate that the funds come from cryptocurrency sales, banks may subject the application to additional scrutiny due to potential money laundering risks. This rigorous examination could lead to:

• Mortgage rejections
• Closure of bank accounts

Conclusion

As cryptocurrencies like Bitcoin evolve, so does their interaction with legal frameworks and financial systems. In Hong Kong, the strict regulations surrounding salary and mortgage applications present hurdles for Bitcoin use. Individuals should consider these factors carefully and seek advice before proceeding with cryptocurrency transactions related to their financial portfolios.