Hong Kong has unveiled its upgraded digital asset policy framework, marking a significant leap in the region's ambition to become a global innovation hub for blockchain and crypto technologies. The Policy Declaration 2.0, released by the Financial Services and Treasury Bureau (FSTB) on June 26, outlines strategic priorities including stablecoin regulation, real-world asset (RWA) tokenization, and enhanced market liquidity.
Key Upgrades from Policy 1.0 to 2.0
The 2022 Policy Declaration 1.0 laid the groundwork by introducing retail participation and pilot projects like green bond tokenization. The new framework, summarized by the acronym "LEAP", expands on this foundation:
- Legal: Streamlining regulations for asset trading and custody services.
- Expend: Diversifying tokenized products (e.g., government bonds, ETFs).
- Advance: Promoting cross-sector collaborations (e.g., blockchain infrastructure).
- People: Fostering talent partnerships and global knowledge sharing.
👉 Explore Hong Kong’s digital asset ecosystem
Stablecoins and RWA Take Center Stage
1. Stablecoin Regulation
- A licensing regime for stablecoin issuers takes effect August 1, 2024.
- Potential applications in cross-border trade, government payments, and supply chains.
2. Real-World Asset Tokenization (RWA)
- Ensemble Project by HKMA will pilot tokenized traditional assets (e.g., funds, deposits) and RWAs (e.g., EV charging stations, solar panels).
- Tax exemptions for tokenized ETFs to boost secondary market trading.
"Policy 2.0 completes the trifecta of regulatory clarity, asset transparency, and tax competitiveness," noted Dr. Xiao Feng, CEO of HashKey Group.
Market Response and Global Implications
- Mainland firms like Lakala Payment and JD.com are leveraging Hong Kong for stablecoin and digital asset ventures.
- Two Chinese securities firms (Guotai Junan International, TF International Securities) recently upgraded licenses to offer virtual asset trading.
FAQs
Q: How does Policy 2.0 differ from 1.0?
A: It emphasizes institutional scalability, global partnerships, and concrete timelines (e.g., stablecoin rules).
Q: What are RWAs?
A: Tokenized physical/financial assets (e.g., gold, renewable energy projects) that enhance liquidity.
Q: Why is Hong Kong pivoting to "digital assets" over "virtual assets"?
A: Aligns with global digitalization trends and broader acceptance (e.g., "digital banks").
👉 Learn about RWA investment opportunities
Conclusion
Hong Kong’s Policy Declaration 2.0 signals a shift from experimental pilots to structured, large-scale adoption—positioning the region as a gateway for global digital asset innovation. With clear regulations and tax incentives, the framework aims to attract international capital and tech talent.