Hong Kong’s policy statement on development of digital assets

Government declarations outlining Hong Kong’s strategy to become a global hub for digital assets, starting with the initial statement in October 2022 and followed by Policy Statement 2.0 in June 2025.

What is Hong Kong’s policy statement on development of digital assets?

Hong Kong’s initial Policy Statement on Development of Virtual Assets, issued by the Financial Services and the Treasury Bureau on October 31, 2022, articulates the government’s vision to create a vibrant digital asset sector by adopting the “same activity, same risks, same regulation” principle, ensuring alignment with international standards while mitigating risks like financial instability and money laundering. It highlights openness to innovations such as tokenizing financial products, including a pilot for issuing tokenized government green bonds to institutional investors via distributed ledger technology, with details on the bond lifecycle from issuance to redemption. Specific initiatives include a proof-of-concept NFT issuance for Hong Kong Fintech Week 2022, offering digital badges with benefits like discounts for future events, and exploration of retail central bank digital currency (e-HKD) through a three-rail approach focusing on technology foundations, use cases, and launch timelines.

Policy Statement 2.0, released on June 26, 2025, builds on the 2022 foundation by introducing the LEAP framework to streamline legal and regulatory processes, expand tokenized products, advance use cases, and foster people and partnerships. Under legal streamlining, the Securities and Futures Commission leads licensing for digital asset dealing and custodian services, with the Hong Kong Monetary Authority regulating banks, and a review of tokenization laws starting with bonds to cover settlement and registration requirements. For expanding products, it regularizes tokenized government bonds totaling HK$6.8 billion in prior issuances, incentivizes real-world asset tokenization like electric vehicle charging stations under Project Ensemble, and applies stamp duty waivers to tokenized ETFs for secondary trading on licensed platforms, alongside profits tax concessions for specified digital assets effective from the 2025/2026 assessment year.

The statement advances use cases by implementing stablecoin issuer licensing on August 1, 2025, with requirements for reserve management and redemption, while Cyberport launches a funding scheme providing mentorship and accelerator programs for high-impact blockchain applications. In people and partnership development, it strengthens talent through industry-academia collaborations, joint research, and global regulatory cooperation to build a sustainable pool of entrepreneurs and technologists. Overall, these policies integrate digital assets into the real economy, promoting efficiency in transactions and consolidating Hong Kong’s position as an international financial center.