Hong Kong plans to relax regulations and roll out a pilot program for tokenisation to support digital asset trading and investment, officials announced on Monday, as the city aims to strengthen its role as a leading fintech and crypto hub.
Julia Leung, CEO of the Securities and Futures Commission (SFC), said at the Hong Kong Fintech Week conference that the regulator will loosen requirements to allow licensed virtual asset trading platforms in the city to connect their order books with overseas affiliates.
The adjustment rolls back existing rules that force virtual asset platforms to keep their order books, the registry of buy and sell offers, confined within Hong Kong. The aim is to give firms better access to global liquidity, Reuters reports.
The SFC will also permit these platforms to offer virtual assets and Hong Kong-regulated stablecoins with under 12 months of history to professional investors, removing the previous requirement for at least a year of track record.
The regulatory shift comes as Hong Kong steps up competition with Singapore and the US to capture growing interest in digital assets and reinforce its reputation as a fintech leader.
At the same time, Hong Kong’s broader financial industry is expected to gain from increased spending on tokenisation and digital transformation, according to the territory’s de facto central bank.
Furthermore, the Hong Kong Monetary Authority launched its “Fintech 2030” roadmap on Monday, which underscores advancements in data, artificial intelligence, system resilience, and tokenisation.
As part of the plan, the HKMA said it will further enhance its Ensemble sandbox to support real-value transactions involving tokenised deposits and digital assets.
“We will now begin incubating mature real-value use cases where tokenised deposits can offer significant advantages, starting with tokenised money market funds,” chief executive of HKMA, Eddie Yue said at the same forum.
“The momentum behind this (digital) transformation is underscored by substantial technological investment with total spending projected to reach more than HK$100 billion ($12.9 billion) every year in the next three years,” Yue added.
This year has seen a wave of tokenised Hong Kong-Dollar and US-Dollar money market fund launches in Hong Kong, underscoring a broader global shift toward digital-native capital pursuing yield-focused investment products.
Tokenised assets continue to attract strong investor interest and inflows, as digital currencies move closer to mainstream acceptance, two senior executives from major global banks said on Monday.
HSBC CEO Georges Elhedery noted in a panel discussion that the bank’s tokenised gold offering in Hong Kong has already become the world’s third-largest of its kind, seeing “mass adoption by retail customers.”
“Our belief, which I think is shared by the leadership of Hong Kong, is that pretty much all transactions will settle on blockchains eventually, and that all money will be digital,” according to Bill Winters, chief executive of Standard Chartered.