The Hong Kong government yesterday (26th) released the 'Hong Kong Digital Asset Development Policy Declaration 2.0', clearly demonstrating its determination to become a "digital financial center". This document focuses on four core aspects of LEAP (Legal, Expanding, Advancing, People), aiming to comprehensively promote digital asset development.
One key point is that the Hong Kong Securities and Futures Commission will implement a comprehensive licensing system for exchanges, custodian institutions, and stablecoin issuers. Notably, from August 1st, stablecoins will be fully regulated and must be listed.
In this policy update, another notable change is the official renaming of "virtual assets" to "digital assets". This linguistic shift aims to diminish the sense of instability associated with "virtual" and emphasize the potential of digital assets to be on par with traditional finance. An official stated:
Renaming to digital assets sounds more positive and better explains that Hong Kong's future development is not just about encryption, but the digitization of entire financial products.
Will Taiwan Follow Suit?
Readers may notice that Taiwanese officials generally tend to use "virtual currency" (with Block more inclined to use "cryptocurrency"), such as the Financial Supervisory Commission's previously published 'Virtual Asset Services Act'. It remains to be seen whether the Hong Kong government's move will influence Taiwan's official terminology.
However, more pragmatically, compared to Hong Kong's proactive approach, Taiwan generally maintains a conservative style of "preventing risks first, then discussing innovation" in financial innovation. In the rapidly changing Web3 era, while this approach can prevent risks, it can also easily miss growth opportunities. Finding a pace suitable for Taiwan and industry development is a goal that everyone needs to work together to achieve.
Details of 'Hong Kong Digital Asset Development Policy Declaration 2.0'
"L" represents legal and regulatory optimization. The declaration proposes establishing a unified and comprehensive digital asset service provider framework, covering trading platforms, stablecoin issuers, custody, and other trading services. The Securities and Futures Commission will serve as the primary licensing body, with the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority simultaneously reviewing legislation, advancing real-world assets (RWA) and bond tokenization, and aligning with the latest guidelines from the International Organization of Securities Commissions and the Financial Stability Board.
Tokenized Products Becoming Normalized
"E" focuses on expanding tokenized products. The government plans to transform government bond tokenization from experimental to routine, clarify stamp duty arrangements for tokenized ETFs, and facilitate secondary market trading with licensed digital asset platforms. The authorities also encourage markets to tokenize diverse assets such as gold, non-ferrous metals, renewable energy, or electric vehicle charging station revenue rights, demonstrating how blockchain can reduce settlement costs and enhance transparency.
Application Scenarios and Cross-Industry Collaboration
"A" and "P" focus on application scenarios and talent collaboration. Stablecoin issuer licenses will be implemented on August 1st, 2025, with the government welcoming licensed institutions to submit public or commercial application proposals. Cyberport will launch a blockchain and digital asset pilot subsidy program to support projects with market influence. Simultaneously, Hong Kong will collaborate with academic circles and international partners to cultivate entrepreneurs, researchers, and technical experts, injecting human resources into the industry chain.
Officials Discussing Vision
Financial Secretary Chan Mo-po noted in the government press release:
"Digital assets are an important part of financial technology. The declaration shows our support for innovation and combines prudent regulation to closely link the digital asset ecosystem with the real economy."
Financial Services and the Treasury Bureau Secretary Christopher Hui added:
"The new framework positions Hong Kong at the forefront of digital transformation, providing a clear roadmap for enterprises and investors."
The Financial Services and the Treasury Bureau and the Securities and Futures Commission will conduct public consultation on trading and custody licensing mechanisms, with details to be gradually announced. Through the "LEAP" framework, Hong Kong hopes to promote innovation while ensuring controllable risks, further consolidating its position as an international financial center.
The 'Hong Kong Digital Asset Development Policy Declaration 2.0' marks Hong Kong's accelerated embrace of blockchain and cryptocurrency, providing a new gateway for global practitioners to enter the Asian market and injecting more vitality into the local financial system.
