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Key Takeaways:
- Stablecoin issuers will need a license from August 1, aligning Hong Kong with other major crypto jurisdictions.
- Tokenized government bonds and ETFs will be promoted, with legal support for broader asset tokenization across sectors.
- The LEAP framework positions Hong Kong as a Web3 leader, with upcoming initiatives in crypto derivatives, innovation funding, and public engagement.
Hong Kong has rolled out a comprehensive digital asset strategy that places stablecoin regulation and tokenization of real-world assets (RWAs) at the center of its ambitions to become a global fintech and Web3 powerhouse.
The new framework, dubbed “LEAP,”—an acronym for Legal clarity, Ecosystem expansion, Application in real-life, and People development—was announced in a policy statement released on Thursday. It builds on Hong Kong’s 2022 digital asset roadmap and introduces major regulatory and developmental shifts across the digital finance space.
Stablecoin Licensing Begins August 1
A major highlight of the policy is the introduction of a formal stablecoin licensing regime set to take effect on August 1. The Securities and Futures Commission (SFC) will oversee licenses for digital asset trading and custody providers, while the Hong Kong Monetary Authority (HKMA) and Financial Services and the Treasury Bureau (FSTB) will handle broader legal reviews.
The government said the new regime will “facilitate the development of real-world use cases,” a goal echoed by Financial Secretary Paul Chan, who emphasized integrating tokenization with daily economic activities and the real economy.
Government to Issue Tokenized Bonds and Promote ETFs
Hong Kong also plans to regularize the issuance of tokenized government bonds and encourage the adoption of tokenized exchange-traded funds (ETFs).
Clarifications on stamp duty treatments will ease the path for tokenized ETFs, which may soon see secondary market trading through licensed platforms. This move not only enhances liquidity but also supports a more inclusive and diversified investment ecosystem for digital securities.
Expanding Tokenization Across Sectors
The government’s vision for tokenization goes beyond finance. The LEAP strategy includes promoting tokenized assets across industries such as precious metals, renewable energy, and even carbon markets.
“We see this as a clear sign that Hong Kong is betting big on the tokenization of real-world assets,” said a policy analyst familiar with the matter. Cyberport funding programs have also been launched to support blockchain startups with strong potential in these sectors.
Also Read: Hong Kong Doubles Down on Crypto: Financial Secretary Pledges Open Market & Web3 Growth
Looking forward, Hong Kong is preparing to launch digital asset derivatives trading for professional investors, following regulatory approvals for spot ETFs, futures, and staking products.
In May, the Stablecoin Bill was passed, reinforcing Hong Kong’s commitment to providing a solid regulatory foundation for digital asset innovation. The government also announced upcoming public consultations on additional licensing frameworks to strengthen oversight and encourage growth.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
