Hong Kong issues Policy 2.0 announcement to Build a Position as a global innovation hub for digital assets.

June 26, News - The Government of the Hong Kong Special Administrative Region issues the "Hong Kong Digital Asset Development Policy Statement 2.0" ( known as the "Policy Statement 2.0" ), and reaffirms the government's commitment to transforming Hong Kong into a global hub for innovation in digital assets.
The "Policy Announcement 2.0" presents the "LEAP" framework, which includes improving laws and regulations (facilitating laws and regulations), expanding the range of tokenized products (expanding the range of tokenized products), enhancing use cases and collaboration across sectors (enhancing use cases and collaboration across sectors), and developing individuals and partnerships (developing individuals and partnerships), among others.
"Improving laws and regulations" indicates that the Hong Kong government is working on building a unified and comprehensive regulatory framework for digital asset service providers, including digital asset trading platforms, stablecoin issuers, digital asset trading service providers, and digital asset custody service providers.
The "Policy Statement 2.0" clearly states that the Securities and Futures Commission in Hong Kong is the main body responsible for regulating digital asset trading service providers, taking on licensing and registration tasks, setting standards, improving regulatory processes, and reducing the likelihood of regulatory arbitrage under various digital asset regulatory frameworks; while the Hong Kong Monetary Authority will be the frontline regulatory body for banks, overseeing their digital asset trading activities.
In the section "Payment of scenario applications and cross-sector cooperation", "Policy Announcement 2.0" supports stablecoins and other tokenized projects, including exploring the use of stablecoins as a payment tool.
The "Policy Announcement 2.0" clarifies that stablecoins provide a cost-effective alternative outside the traditional system, with the potential to rejuvenate payments, manage supply chain activities, and capital market activities. The Hong Kong government will implement a regulatory system for stablecoin issuers starting August 1, 2025, to establish relevant requirements for the management of reserve assets, stability mechanisms, redemption processes, and risk management carefully.
"Policy Announcement 2.0" shows that many companies involved in cross-border trade and settlement express significant interest in using stablecoins to reduce costs and accelerate trading processes. To realize the full potential of stablecoins, the government and regulatory bodies will provide a favorable market environment and necessary regulatory guidance to promote the research and implementation of solutions by licensed stablecoin issuers in Hong Kong, addressing the real pain points in economic activities. The Hong Kong government welcomes proposals from market participants on how to experiment with and use licensed stablecoins, such as using them to improve the efficiency of government payments.
In addition, Digital Harbor will launch a pilot funding program for blockchain and digital assets, to provide funding for advanced projects with future practical applicability, tokenization, and market impact.
Below is the full text of policy statement 2.0:
Announcement of the Digital Asset Development Policy in Hong Kong 2.0
Vision: Build a Position for a trusted digital asset dedicated to enhancing innovation
The Government of the Hong Kong Special Administrative Region is committed to building Hong Kong as a global leader in digital assets - a trusted market that allows innovation to thrive in a controlled risk environment, and brings tangible benefits to the real economy and financial markets.
The "Digital Asset Development Policy Statement in Hong Kong 2.0" ( "Policy Statement 2.0" ) issued by the Financial Services and the Treasury Bureau ( "Treasury Bureau" ) is an active response from Hong Kong to the ongoing developments in the global digital asset market. Based on the principle of "same activity, same risks, same rules", the "Policy Statement 2.0" aims to outline future strategies and enable the industry to evolve, enhance financial inclusion, train talent, while ensuring investor protection and maintaining financial security, and reinforcing Hong Kong's position as one of the leading international financial centers.
"LEAP": Towards the formation of a reliable, sustainable digital asset ecosystem deeply integrated into the real economy
Based on the measures presented in the first "Political Declaration" in October 2022, including the establishment of a strong organization, the launch of digital asset trading funds ("ETF") and other innovative products, opening investment channels by allowing retail participation, and starting pilot projects like green bond tokens, Hong Kong is now ready to enter ("LEAP") to form a reliable, sustainable, and deeply integrated ecosystem in the real economy of digital assets. The Securities and Futures Commission ("SFC") previously announced the "ASPIRe" roadmap, aimed at leading the digital asset system in Hong Kong into the future in a constantly changing environment, by implementing a series of measures such as adaptive compliance and a product framework (like derivatives trading) to achieve a balance between investor protection and market competitiveness. The "Policy Declaration 2.0" outlines the next phase of development, focusing on enhancing the liquidity of digital asset trading and stimulating the provision of more diverse digital asset products, to enhance Hong Kong's position as a global digital asset hub. The government and regulatory bodies also welcome the participation of high-quality digital asset service providers from around the world in the market, to enhance liquidity and healthy, organized competition.
To achieve this vision and goals, and to create an ecosystem for digital assets that deeply integrates with the real economy and financial markets, looking towards the future, we have proposed a set of strategic policy directions, and we will implement appropriate measures. In setting the directions and policies, we strive to ensure that they are not affected by current technical constraints, and to ensure their adaptability to future developments in digital assets, integrating them into the real economy and financial system for sustainable growth. These measures are based on the "LEAP" framework, which is as follows – ( "L" Improving laws and regulations ), ( "E" Expanding the range of tokenized products ), ( "A" Enhancing use cases and cross-sector collaboration ), and ( "P" Developing talent and partnerships ), to build a reliable, innovative, and vibrant ecosystem for digital assets, and to enhance Hong Kong's leading position in the global financial landscape.
(Simplifying the legal and regulatory aspects) Improving laws and regulations
(A unified and comprehensive regulatory framework
Based on the progress made since 2022, the government will continue to cooperate with regulatory bodies and industry stakeholders to develop a comprehensive legal and regulatory framework governing digital assets, to ensure the sustainable and responsible development of the digital asset ecosystem in Hong Kong. This framework includes digital asset exchanges, stablecoin issuers, digital asset trading service providers, and digital asset custody service providers, focusing on protecting investors and consumers. The next key step is to conduct public consultations on the licensing mechanism for digital asset trading service providers and digital asset custody service providers, to meet the needs of investors seeking high liquidity, large trades, and secure custody assets. The government proposes to appoint the Securities and Futures Commission as the main regulatory body for digital asset trading service providers, responsible for licensing and registration issues, setting standards, improving regulatory processes, and reducing the potential for regulatory arbitrage under various digital asset regulatory frameworks. Meanwhile, the Hong Kong Monetary Authority )"HKMA"( will act as the linear regulator for banks, overseeing their activities in digital asset trading.
In the same vein, the Securities and Exchange Commission will act as the primary regulatory authority for digital asset custodial service providers, as it will be responsible for licensing and registration, in addition to setting standards, while the Monetary Authority will oversee activities related to digital asset custody as a front-line regulatory body for banks.
These unified and comprehensive regulatory arrangements will enhance market credibility, boost digital asset activities and large trades, and provide clear guidance for market participants. These arrangements will also effectively support risk management and provide liquidity, ensuring the establishment of a balanced ecosystem to promote market innovation and protect investors. Periodic reviews and close communication with stakeholders will be conducted to ensure the framework's ability to adapt to technological and market developments.
At the same time, Hong Kong will continue to implement international standards related to digital assets, including the "Proposal for a Cryptocurrency and Digital Asset Market Policy" by the International Securities Commission, the "Framework for Regulating Global Crypto Asset Activities" by the Financial Stability Board, the "Prudential Approach to Managing Crypto Asset Risks" by the Basel Committee on Banking Supervision, in addition to the "Crypto Asset Reporting Framework" by the Organisation for Economic Co-operation and Development to enhance tax transparency.
) Review of the laws and regulations related to tokens
The tokenization of financial assets and financial instruments in the real world presents an opportunity to merge new technology with traditional finance, which can enhance economic activity and renew the structure of financial markets, thereby improving efficiency, reducing costs, increasing transparency, and enhancing investor participation. To fully leverage these potentials, a clear, straightforward, and convenient legal and regulatory system is essential. The public finance management and the monetary authority will lead the review of the relevant legal and regulatory framework, based on international experiences and practices, to promote the application of tokenization in Hong Kong. The initial review phase will focus on the bond market that has passed the proof of concept stage, and is also expected to provide a reference for the tokenization of financial assets and other financial instruments in the real world. The process of issuing and trading fully tokenized bonds will be reviewed, including but not limited to settlement, registration, and record-keeping requirements. During the review process, the government will collaborate with experts from the legal field and industry stakeholders to ensure that the review outcomes and improvement proposals are relevant, applicable, and meet future development needs, making Hong Kong a leader in this innovative field.
(“E”xpanding the suite of tokenised products) Expand the suite of tokenised products
(c) Organizing the issuance of tokenized government bonds
The government issued cryptocurrency green bonds twice totaling approximately 68 billion Hong Kong dollars, which proactively demonstrates the benefits of the encryption plan. Based on this, the government will generalize the issuance of encrypted government bonds and explore arrangements for different currencies and different maturities, as well as other innovative options. The government hopes that this step will provide the market with stable and high-quality digital bonds, increasing access and attracting a wide range of investors. To further enhance the advantages of encryption, the Financial Management and Monetary Authority will continue to communicate with industry experts to understand market opinions from different aspects, including the integration of digital currencies to improve trading efficiency, trading application scenarios in the secondary market, and increasing investor participation in the local bond market. The government's goal in issuing encrypted bonds as a first step and generalizing them is to establish a global standard, enhance market confidence in this technology, and at the same time encourage public and private sectors to adopt it.
( Summary: A future that combines innovation, trust, and opportunities
高#