The Hong Kong government has launched the "Digital Asset Development Policy Declaration 2.0"

The Hong Kong Special Administrative Region Government released the "Hong Kong Digital Asset Development Policy Declaration 2.0" on June 26, further clarifying its determination to build Hong Kong into a global digital asset innovation center. This new policy declaration is developed based on the first policy declaration issued in October 2022.

The "Policy Declaration 2.0" puts forward the vision of building a trustworthy and innovation-focused digital asset ecosystem, while emphasizing the importance of risk management and investor protection. The government hopes to bring real benefits to the实体经济 and financial markets through this initiative. The new policy declaration introduces the "LEAP" framework, which mainly includes the following aspects:

Legal and Regulatory Optimization

The government is establishing 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, along with the Hong Kong Monetary Authority, will work together to conduct a comprehensive legal review to promote the tokenization of real-world assets and financial instruments.

Expand the Scope of Tokenized Products

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 the future secondary market trading of related tokenized exchange-traded funds through licensed digital asset trading platforms or other platforms. In addition, the government will also promote the wider tokenization of assets and financial instruments, showcasing the diverse applications of this technology in various fields such as precious metals, non-ferrous metals, and renewable energy.

Promote application scenarios and cross-industry cooperation

The licensing mechanism for stablecoin issuers will be implemented on August 1, which will help promote the development of practical 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. In addition, Cyberport will launch a blockchain and digital asset pilot funding program to provide financial support for projects with future application potential, iconic 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 excellent center for digital asset knowledge sharing and facilitating international cooperation. This includes joint research programs and global regulatory collaboration. The government will establish a sustainable talent pool by nurturing a new generation of entrepreneurs, researchers, and technical experts.

The Financial Secretary, Paul Chan, stated that digital assets are an important and highly potential part of the fintech sector. Through blockchain technology, more efficient and lower-cost financial transactions can be achieved, making financial services more inclusive. The "Policy Declaration 2.0" showcases the government's vision for the development of digital assets and demonstrates the practical application of tokenization through practice, promoting the diversification of application scenarios.

The Secretary for Financial Services and the Treasury, Hui Chengyu, pointed out that Hong Kong's unique advantages give it a head start in promoting the entry of traditional finance into the digital asset era. The framework established by the "Policy Declaration 2.0" will help Hong Kong form a trustworthy, 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.