- Hong Kong is preparing a second digital asset innovation plan, with a focus on digital securities and tokenized trading.
- The government aims to blend traditional finance with new digital asset technology for enhanced security and flexibility.
- Recent projects include the regulatory Sandbox Project Ensemble, testing wholesale central bank digital currencies and asset tokenization.
- Financial Secretary Paul Chan sees Hong Kong as a lead example for China, especially with policies on foreign currency stablecoins.
- In 2024, local banks recorded $2.2 billion in digital asset transactions and held $650 million in digital asset custody.
Hong Kong is set to launch a new phase in its digital asset policy, according to a recent statement from Financial Secretary Paul Chan. The upcoming plan will expand on the city’s earlier approach to cryptocurrencies, announced in 2022. The government aims to advance its strategy around digital securities and tokenized trade.
Chan stated that Hong Kong’s next steps will merge traditional financial services with modern digital asset technology. The goal is to improve the security and flexibility of digital assets in the real economy. The plan emphasizes support for both local and international innovators.
One key development is the planned announcement on digital assets, expected to draw on lessons from regulatory sandboxes. The previous stablecoin sandbox led to new rules for stablecoins. There is speculation that the next phase could relate to Project Ensemble, a program run by the Hong Kong Monetary Authority. This project lets banks and companies test wholesale central bank digital currencies (CBDCs)—a type of digital currency used for interbank settlements—as well as tokenized deposits and real-world asset tokenization. These efforts include applications such as bond issuance, corporate treasury management, and supply chain tracking using blockchain technology.
Participants in the Project Ensemble trials include major global banks like HSBC, JP Morgan, and Standard Chartered, as well as asset managers like BlackRock and Franklin Templeton. Many large Chinese companies have also joined through their Hong Kong branches. These initiatives could have an impact beyond Hong Kong and influence the broader region.
On the subject of regulatory leadership, Chan described Hong Kong as both a “firewall” and an “experimental field” for China’s financial system. He pointed to Hong Kong’s openness to foreign currency stablecoins, positioning the city as a testing ground under the “one country, two systems” policy.
Chan reported that the Securities and Futures Commission has approved ten cryptocurrency trading platforms, with eight more under review. While exact exchange volumes were not disclosed, Chan shared bank-related numbers. According to him, local banks processed digital asset and related transactions worth $2.2 billion during 2024. As of year-end, banks in Hong Kong held $650 million in digital asset custody.
Officials have indicated that more details about Hong Kong’s new digital asset direction will become available soon.
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