On 26 June 2025, the Financial Services and the Treasury Bureau (FSTB) issued Policy Statement 2.0 on the Development of Digital Assets[1] in Hong Kong (“Policy Statement 2.0”). Building upon the foundational measures outlined in the initial policy statement released in October 2022, the Policy Statement 2.0 highlights the continuous commitment of the Hong Kong Government (“Government”) to positioning Hong Kong as Asia’s leading hub for digital assets (“DA”). It also highlights how the Government plans to lead and help growing the tokenization of real-world assets (“RWAs”) and financial instruments.
Policy Statement 2.0 articulates a vision for a trusted and innovative DA ecosystem that emphasizes risk management and investor protection while delivering concrete benefits to the real economy and financial markets. The Government outlines “a series of strategic policy directions and corresponding initiatives”, including the tokenization initiatives, under the “LEAP” framework, focusing on the following aspects:
- “L”egal and regulatory streamlining;
- “E”xpanding the suite of “tokenized products”;
- “A”dvancing use cases and crosssectoral collaboration; and
- “P”eople and partnership development.
This article summarizes the Government’s tokenization and other key initiatives under Policy Statement 2.0, highlights major progress achieved since June 2025, and explains how these initiatives may benefit Hong Kong’s DA industry.
1. Legal and Regulatory Streamlining
(a) Unified Regulatory Framework
The Government commits to establishing a comprehensive legal and regulatory regime for DA stakeholders, including, among others, DA exchanges, stablecoins issuers, DA dealing service providers and DA custodian service providers.
Under this regime, the Securities and Futures Commission (SFC) is expected to be the leading authority for the licensing and registration of DA dealing and custodian service providers. Meanwhile, the Hong Kong Monetary Authority (HKMA) is expected to be the frontline regulator for banks to supervise their DA dealing and custodian activities.
In June and December 2025, the Government lay the essential groundwork for this regime. The FSTB and the SFC launched joint public consultations on legislative proposals for licensing regimes for virtual assets dealing, custodian, advisory and assets management service providers, with plans to introduce the relevant bill to the Legislative Council in 2026.
(b) Legal and Regulatory Review on Tokenization
The FSTB and the HKMA will lead a review of the legal and regulatory framework to promote further adoption of tokenization of RWAs and financial instruments in Hong Kong. This review will initially focus on the bond market and address different aspects of tokenized bond issuances and transactions, such as settlement, registration and record requirements.
Hong Kong’s DA industry may benefit from this clear and unified regulatory framework through reduced compliance uncertainty and enhanced market confidence that attracts investors and global service providers. Regular reviews and stakeholder engagement may help to ensure a practical and future-proof framework adaptable to technological and market developments.
2. Expanding the Suite of Tokenized Products
(a) Tokenized Government Bonds
The Government will regularize tokenized Government bonds issuance, exploring different currency and tenor options alongside innovative features. The FSTB and the HKMA will continue to engage industry experts to seek market insights on relevant areas including digital money integration, secondary market trading, and ways to broaden investor access to the local bond market.
In November 2025, following the two successful issuances in 2023 and 2024, the Government reached a further milestone by issuing its third tokenized government bond. In the third issuance, the Government introduced new features and achieved key breakthroughs. Specifically, the issuance is: (i) the world’s first digital bond offering to integrate tokenized central bank money (e-CNY and e-HKD) into the settlement process, and (ii) the world’s largest digital bond issuance as of November 2025, with an issuance size of HK$10 billion and total subscriptions exceeding HK$130 billion.
Regular tokenized Government bond issuance provides Hong Kong’s DA industry with a steady supply of high-quality and liquid digital bonds, attracting broader investor participation, building technology confidence, and encouraging wider adoption of tokenized bonds across both the public and private sectors.
(b) Tokenized RWAs and Financial Assets
To incentivize tokenization, the Government had, among other initiatives, clarified that the sale, purchase or transfer of the tokenized shares or units of exchange traded funds (“ETFs”) conducted on licensed digital asset trading platforms or through other channels in Hong Kong, are exempt from stamp duty. The Government remains open to reviewing the tax treatment for the transfer of other SFC-authorized funds and proposes legislative expansion of profits tax concessions for privately offered funds and family-owned investment holding vehicles to include specified DA transactions.
In addition, the Government will also promote tokenization of diverse assets and financial instruments, including precious metals (e.g. gold), non-ferrous metals, and renewable energy assets (e.g. solar panels).
By leading with tax incentives and demonstrating the versatility of tokenization across sectors, the Government has tried to signal strong policy support, lower entry barriers, build market confidence, and incentivize private-sector participation in Hong Kong’s DA and tokenization market.
3. Advancing Use Cases and Crosssectoral Collaboration
(a) Supporting Stablecoin
The Stablecoins Ordinance (Cap. 656) took effect in Hong Kong on 1 August 2025, establishing a mandatory licensing regime for fiat-referenced stablecoin issuers. Building on this development, in August 2025, the HKMA published (i) Guideline on Supervision of Stablecoin Issuers and (ii) Guideline on Anti-Money Laundering and Counter-Financing of Terrorism, setting regulatory expectations for licensed issuers.
The Government welcomes proposals from market participants on potential pilot use cases for licensed stablecoins, including use cases that enhance the efficiency of Government payments.
These measures may provide Hong Kong’s DA ecosystem with a cost-effective and efficient alternative to traditional systems for payments, while ensuring the stability and trustworthiness of stablecoin issuances to make them more reliable for both domestic and international use.
(b) Facilitating Collaboration
Cyberport will collaborate with DA stakeholders to support tokenization projects in Hong Kong through business matching, technical assistance, mentorship from industry experts, and the opportunity to join a range of accelerator programs focused on DA and Web3.
To further drive tokenization and digital asset applications, Cyberport launched Blockchain & Digital Asset Pilot Subsidy Scheme in June 2025. This scheme offers funding support to blockchain and Web3.0 companies at the development stage, enabling them to create innovative and impactful solutions. Each eligible pilot project can receive a funding support up to 80% of its cost, with a maximum subsidy of HK$500,000.
Additionally, the Government will facilitate partnerships among technology providers, regulators and law enforcement agencies to optimize Regtech, cybersecurity, surveillance and monitoring solutions tailored to the specific needs of Hong Kong’s DA ecosystem.
These initiatives create a dynamic environment for startups to explore and develop innovative fintech solutions through funding, expertise and infrastructure support.
4. People and Partnership Development
The Government will continue to support training and talent development for the DA industry, with a focus on blockchain adoption, AI integration and DA innovations. Cyberport will leverage its training-related initiatives on Web3, blockchain and AI technologies, including experience sharing sessions and partnerships with global DA firms. The universities will partner with industry players to bridge academic research with practical applications in the DA field.
The Government will, together with regulators, participate in international cooperation, including establishing memoranda of understanding with other jurisdictions to enable information sharing and supervisory collaboration in the DA field.
These efforts may help to develop local talent, attract global DA experts to Hong Kong, and build a sustainable talent pool to support the city’s DA ambitions.
Next Steps for Market Participants
Through Policy Statement 2.0’s forward-looking policies and measures, Hong Kong reaffirms its commitment to building a trusted and sustainable DA ecosystem that may facilitate the growth of tokenization of RWAs and financial instruments and balances robust investor protection with market competitiveness. Hong Kong signals its openness to global investors and high‑quality DA service providers, inviting them to participate in its vibrant and rapidly growing DA market.
If you are interested in structuring tokenization projects in Hong Kong, establishing or expanding your DA operations, or navigating licensing requirements, contact our Fintech team today to explore tailored legal solutions.
Co-Authors: Jay Lee and Shirley So
[1] The term “Digital Assets” was used by the Government in lieu of “Virtual Assets” to better reflect the nature of this asset class, and align with the understanding across international markets. “Digital asset” is a general term with a broad scope, covering, among others, “virtual asset”, which is a legally defined term under the existing Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).
