Hong Kong releases the "Digital Asset Development Policy Declaration 2.0", committed to building a global innovation center

Today, the Hong Kong SAR government released the "Hong Kong Digital Asset Development Policy Declaration 2.0", reaffirming its commitment to making Hong Kong a global innovation center in the digital asset field. This latest policy declaration further improves upon the first declaration released in October 2022.

The "Policy Declaration 2.0" clarifies the government's vision to build a trustworthy and innovation-focused digital asset ecosystem, prioritizing risk management and investor protection, while also committed to bringing substantial benefits to the real economy and financial markets. The new policy declaration introduces the "LEAP" framework, which mainly includes the following aspects:

Legal and Regulatory Optimization

The government is constructing a unified and comprehensive regulatory framework for digital asset service providers, covering digital asset trading platforms, stablecoin issuers, digital asset trading service providers, and digital asset custody service providers. The Securities and Futures Commission will become the main regulatory body for the licensing mechanism of future digital asset trading service providers and digital asset custody service providers. Meanwhile, the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority will lead a comprehensive legislative review to facilitate the tokenization of real-world assets and financial instruments.

Expansion of Tokenized Product Types

The government plans to regularize the issuance of tokenized government bonds and provide incentives for the tokenization of real-world assets to enhance liquidity and popularity. The government supports related tokenized exchange-traded funds to be traded in the secondary market in the future through licensed digital asset trading platforms or other platforms. In addition, the government will promote the tokenization of a wider range of assets and financial instruments, demonstrating the diverse applications of this technology in different fields such as precious metals, non-ferrous metals, and renewable energy.

Application Scenarios Promotion and Cross-Industry Cooperation

The licensing mechanism for stablecoin issuers will be implemented on August 1, which will help promote the development of substantial application scenarios. The government is committed to strengthening cooperation between regulatory agencies, law enforcement agencies, and technology providers to develop digital asset infrastructure. The government welcomes market participants to propose suggestions on how to experiment with and use licensed stablecoins. Cyberport will launch a blockchain and digital asset pilot funding program to provide financial support for projects with future application potential, significance, and market impact.

Talent and Partner Development

The government will collaborate with the industry and academia to promote talent development, positioning Hong Kong as an excellence center for digital asset knowledge sharing and facilitating international cooperation, including joint research programs and global regulatory collaboration. The government will establish a sustainable talent pool by nurturing a new generation of entrepreneurs, researchers, and technology experts.

The Financial Secretary, Paul Chan, stated that digital assets are an important component of financial technology, with significant growth potential. Through blockchain technology, more efficient and cost-effective financial transactions can be achieved, making financial services more inclusive and accessible. The "Policy Declaration 2.0" showcases Hong Kong's vision for the development of digital assets and demonstrates the practical applications of tokenization, promoting the diversification of application scenarios.

The Secretary for Financial Services and the Treasury, Hui Chengyu, emphasized that Hong Kong's unique advantages position it favorably in facilitating the transition of traditional finance to the digital asset era. The framework established by the "Policy Declaration 2.0" will assist Hong Kong in moving towards "LEAP", creating a trusted, sustainable, and deeply integrated digital asset ecosystem within the real economy.

The Financial Services and the Treasury Bureau and the Securities and Futures Commission will conduct a public consultation on the licensing mechanism for digital asset trading service providers and digital asset custody service providers.