Hong Kong Launches Digital Assets Policy 2.0 to Boost Tokenization

Hong Kong has launched Digital Assets Policy 2.0, a significant initiative aimed at boosting tokenization and solidifying its position as a global leader in digital finance. The new policy, unveiled on June 26, builds upon the initial statement released in October 2022, emphasizing innovation, trust, and responsibility in the digital asset industry.

The policy is structured around the LEAP framework, which stands for Legal and regulatory streamlining, Expanding tokenized products, Advancing use cases, and People and partnership development. This framework is designed to position Hong Kong as a reputable hub for blockchain innovation while ensuring heavy controls and investor security.

One of the key components of the policy is the streamlining of laws and regulations to ease the burden on digital asset (DA) service providers. This includes establishing licensing for exchanges, stablecoin issuers, dealers, and custodians. The Securities and Futures Commission (SFC) will oversee the issuance of these licenses, while the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority will review laws to facilitate tokenized assets, including digital bonds. This legal reform aims to modernize systems such as settlement and registration through tokenization.

The policy also seeks to expand the range of tokenized products. Hong Kong will formalize tokenized government bonds and provide incentives to tokenize real-world assets such as ETFs. The government will also consider tokenizing assets like gold, solar panels, and non-ferrous metals. This move is expected to introduce new dimensions in the investment market and enhance market liquidity through secondary market trading of tokenized products on licensed digital asset exchange platforms.

Another significant aspect of the policy is the launch of a stablecoin licensing regime, which will begin on August 1, 2025. Many companies have already expressed interest in applying for this licensing. The regime aims to enable secure stablecoin payments and regulated use of stablecoins in financial services. Cyberport, the tech hub of Hong Kong, will introduce a funding program to support the development of blockchain and DA products, focusing on high-impact applications that can serve as industry examples and inspire future innovations.

The policy also emphasizes the development of people and partnerships. The government aims to build strong connections between academia, industry, and regulators. It actively promotes education to train the next generation of blockchain specialists, with the vision of establishing Hong Kong as a digital asset research and international collaboration hub. This includes both developing a sustainable talent pipeline and attracting global collaboration.

Financial Secretary Paul Chan highlighted the potential of digital resources to reduce transaction costs and facilitate financial inclusion. He noted that tokenization is practical and will assist Hong Kong in connecting finance comprehensively to social and economic development. Chan further stated that the city's strategy combines tough regulation with encouraging market innovation.

Secretary Christopher Hui added that Hong Kong is poised to mediate between the past of traditional finance and the new cosmopolitan of the digital future. Officials described Policy Statement 2.0 as a clear path to building a stable, pioneering, and inclusive digital asset ecosystem.

In conclusion, Digital Assets Policy 2.0 outlines a powerful vision of a regulated but progressive crypto market. With its strategic structure and international orientation, Hong Kong is well on its way to leading the digital finance era.