๐ Hong Kong Sets Out Plan to Regulate Crypto & Encourage Tokenization
On June 26, 2025, Hong Kong released Policy Statement 2.0, a sweeping upgrade to its 2022 digital asset framework. The move signals the cityโs bold ambition to become Asiaโs premier regulated crypto & tokenization hub, combining investor protection with decentralized finance innovation.
๐งญ Core Framework: LEAP for Crypto & Tokenization
Hong Kong’s new strategy is built around the LEAP framework:
- Legal & regulatory clarity
- Expanding tokenized products
- Advancing use cases
- People & partnerships
This includes unified licensing for crypto exchanges, stablecoin issuers, dealers, and custodiansโoverseen primarily by the Securities and Futures Commission (SFC) alongside the Hong Kong Monetary Authority (HKMA) .
๐ Tokenization on the Rise
- Government bonds: The policy mandates regulatory pathways for tokenized government bonds, creating a legal foundation for issuance and trading .
- Realโworld assets (RWAs): Plans extend to tokenizing commodities (e.g. gold, metals), renewable energy assets, and tokenized ETFs, facilitated by clarified tax and stamp-duty guidance.
- Sandbox innovation: HKMAโs Project Ensemble continues testing tokenized inter-bank settlements and deposit scenarios.
- Stablecoin regime: A licensing framework for fiat-backed stablecoins takes effect August 1, attracting major players like Ant Group and the Standard CharteredโAnimoca joint venture.
๐ฆ Regulatory & Industry Response
- SFC oversight: Framework includes oversight for crypto exchanges, staking, OTC desks, custodians, and digital-derivative platforms.
- Holistic coverage: Regulations ensure tokenized securities follow existing prospectus and conduct rules under the Securities and Futures Ordinance.
- Talent & ecosystem growth: Partnerships with academia, fintech funding via Cyberport, and job creation initiatives will support workforce development .
๐ Why This Matters
- Investor Protection + Innovation: A balanced approach mitigates fraud and systemic risks while enabling blockchain-driven market evolution .
- Regional advantage: With Singapore tightening crypto rules and China staying cautious, Hong Kong is positioning itself as a more progressive yet regulated alternative.
- Institutional magnet: Tax breaks, stablecoin clarity, and licensing certainty attract global players and financial institutions.
๐ญ What to Watch Next
- Stablecoin licensing rollout (Aug 1): Monitor applicants like Ant International and banking partnerships.
- Bond and ETF token launches: Timing for bond issuance, secondary-market trading setups, and tax-stamp rules.
- Use-case pilots: Progress in tokenized gold, renewable energy assets, and interbank blockchain payments.
- Regulator updates: SFC and HKMA consultations on custody, OTC, staking, and derivative licensing.