Hong Kong reveals new stablecoin rules and tokenized bond plans

Hong Kong’s latest digital asset blueprint places stablecoin regulation and asset tokenization at the heart of its strategy to become a global crypto and fintech hub.

The policy statement, issued on Thursday, introduces a framework known as “LEAP,” targeting legal clarity, ecosystem expansion, real-world applications, and talent development. It builds on the foundation laid by the government’s first policy statement in October 2022.

As part of the new framework, the government will implement a licensing regime for stablecoin issuers starting Aug. 1, which “will facilitate the development of real-world use cases,” per the announcement.

The Securities and Futures Commission (SFC) will oversee licensing for digital asset (DA) dealing and custody providers, while the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority will lead a legal review to support the tokenization of real-world assets (RWAs).

Hong Kong to regulate tokenized bonds

The government also plans to “regularise the issuance of tokenized Government bonds” and promote tokenized ETFs by clarifying their stamp duty treatment.

“With that, the Government welcomes the introduction of secondary market trading of these tokenized ETFs on licensed DA trading platforms or through other channels,” the policy statement said.

Beyond bonds and funds, the government said it aims to incentivize tokenization across broader sectors, including metals and renewable energy assets, demonstrating “the versatility of this technology across sectors such as precious metals (e.g. gold)... and solar panels.”

The policy also includes new measures to boost innovation, such as a Cyberport funding program aimed at supporting standout blockchain and digital asset projects.

In a statement, Financial Secretary Paul Chan said the new framework “showcases the practical use of tokenization” and aims to “build a more flourishing DA ecosystem which will integrate the real economy with social life.”

The government said it will soon launch public consultations on new licensing regimes.

Hong Kong eyes crypto derivatives

Earlier this month, Hong Kong’s financial authorities said they are preparing to introduce digital asset derivatives trading for professional investors.

The initiative follows recent approvals for spot crypto ETFs, futures products, and staking services, including a green light for HashKey to offer staking in April, as the city positions itself as a leading digital finance hub.

Furthermore, in May, the city’s Legislative Council passed the Stablecoin Bill, paving the way for a regulated framework that could position the region as a global leader in digital assets and Web3 development.