Joseph Chan: Hong Kong Continues to Expand the Digital Asset Ecosystem; Tokenized Bond Issuance Has Become Routine

Regarding digital asset development policy, Acting Secretary for Financial Services and the Treasury Joseph Chan, in reply to a legislator's question, said that the authorities and the industry have been actively advancing various initiatives, gradually translating the policy vision into substantive progress and market outcomes. On expanding the variety of tokenized products, the Hong Kong Government has made tokenized bond issuance routine and in September this year issued the fourth batch of digital green bonds, totaling approximately HK$20 billion, further improving the digital ecosystem and taking the lead in the development of tokenized investment products. As of end-September 2026, the SFC had authorized 13 tokenized money market funds, one tokenized gold investment product, two gold ETFs (exchange-traded funds) with tokenized shares, and one covered call ETF with tokenized shares. The assets under management of the tokenized shares of these 17 retail investment products currently amount to approximately HK$10.3 billion. With the SFC's approval, two SFC-authorized tokenized money market funds also began round-the-clock secondary market trading on licensed virtual asset trading platforms on October 26. On optimizing the legal and regulatory framework, the authorities continue to clarify compliance pathways, seeking to promote responsible innovation and sound market development while upholding risk management and investor protection. Among other things, the Hong Kong Government and the SFC will submit a bill to the Legislative Council by the end of this year to amend the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) to expand the regulatory regime currently applicable to virtual asset trading platforms to cover virtual asset trading, advisory, management and custody services. To promote market development, the Hong Kong Government and financial regulators adhere to the principle of "same business, same risks, same rules" and, through a risk-based and technology-neutral regulatory approach, promote the steady development in Hong Kong of virtual assets and tokenized investment products as well as related businesses. The relevant regulation aligns with the standards for traditional financial services and securities and is appropriately adjusted to the characteristics of virtual assets and tokenized investment products, so as to promote responsible innovation in the industry while fully protecting investors. On advancing use cases and cross-sector cooperation, with the Stablecoins Ordinance (Cap. 656) implemented in August last year, the HKMA granted two stablecoin issuer licences in April this year. The relevant stablecoins have a wide range of use cases, covering cross-border payments, local payments and tokenized asset trading, among others, serving different types of users. In these use cases, stablecoins can enhance transaction efficiency and reduce transaction costs, thereby creating real value for the real economy. The Hong Kong Government also supported Cyberport in launching the "Blockchain and Digital Asset Pilot Subsidy Scheme" in June last year, which successfully funded nine pilot projects covering areas such as real-world asset tokenization, payment and stablecoin infrastructure, security and risk management, and decentralized identity. As of June this year, the scheme had facilitated a total of HK$230 million in asset tokenization, and six of the projects have entered commercial application. Recognizing the scheme's substantive benefits to the market, the Hong Kong Government announced on November 2 its support for Cyberport to launch the scheme again, with applications accepted from the same day. In addition, through the EnsembleTX project jointly led by the SFC and the HKMA, the Hong Kong Government is also encouraging the industry to explore the use of tokenized deposits in tokenized money market fund transactions to manage liquidity and funding needs in real time. On talent and partner development, the Hong Kong Government continues to promote talent training and development in the Web 3.0 industry, with particular focus on blockchain applications and digital asset innovation, while also striving to attract global digital asset professionals to Hong Kong. Among other things, the Hong Kong Government has allocated substantial funding to support Cyberport in developing the Web 3.0 ecosystem, providing physical and online courses, bootcamps, seed funds and internship opportunities in collaboration with academic institutions, and establishing the "Web3.0 Investor Network" to promote talent cultivation, industry application and public awareness. As of end-September 2026, the relevant activities have brought together more than 320 enterprises, and the relevant courses have attracted more than 7,000 participants, with notable results. In addition, digital asset and Web3.0 professionals can settle in Hong Kong through various channels. Joseph Chan also mentioned that the Hong Kong Government and the SFC attach great importance to the quality of licensed virtual asset trading platforms in order to properly manage risks and fully protect investors. International virtual asset trading platforms may apply to the SFC for a licence as long as they meet the relevant statutory requirements and the SFC's regulatory requirements. The SFC and Invest Hong Kong have also engaged with these international platforms to introduce Hong Kong's regulatory requirements and market opportunities. In fact, in recent years the SFC has gradually broadened the products and services that licensed platforms may offer, facilitated access to global liquidity, and allowed the development of more digital assets and tokenized products under appropriate safeguards. As mentioned above, the Hong Kong Government and the SFC will also soon submit a bill to the Legislative Council to bring more types of virtual asset services under the regulatory regime, promoting a more diversified range of international service providers to conduct business in Hong Kong. The Hong Kong Government and the SFC will continue to enhance the competitiveness of Hong Kong's digital asset market through clear regulation, talent and infrastructure development, and international cooperation.