Hong Kong is accelerating its efforts to establish itself as a global Web3 and digital finance leader, and tokenization and stablecoins are at the core of its strategy.
According to the South China Morning Post, Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury, has identified tokenization as a transformative force that could redefine the country’s traditional financial markets.
In recent years, Hong Kong has made significant strides in crypto adoption and tokenization. The Hong Kong Monetary Authority (HKMA) launched Project Ensemble Sandbox in August 2024, testing tokenized money for interbank settlements and asset transactions. The central bank took further steps in October, partnering with the central banks of Thailand and Brazil to explore tokenization use cases in cross-border finance.
The island’s regulators have also begun issuing virtual asset trading licenses and permitting tokenized investment products. Most recently, China Asset Management’s Hong Kong division secured approval from the Hong Kong Securities and Futures Commission (SFC) to launch a tokenized money market fund for retail investors. The fund is set to debut by February 2025.
Beyond tokenization, Hong Kong is deepening its commitment to stablecoins. Hui reaffirmed the government’s dedication to developing fiat-backed stablecoins, aligning with global trends seen in countries like the United States, where stablecoin regulations have become a focal point. Notably, in December 2024, he proposed a stablecoin regulatory framework that mandates issuers to hold reserves equivalent to the value of their circulating stablecoins. The bill also grants the HKMA authority to issue stablecoin licenses to compliant firms.
However, pressure is mounting for Hong Kong to accelerate its crypto-friendly initiatives. On February 5, 2025, lawmaker Johnny Ng urged the government to intensify its crypto-friendly initiatives in response to the pro-crypto policies of the Trump administration in the United States. He warned that if Hong Kong does not act swiftly, it risks losing ground in the global race for digital asset innovation.
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