Hong Kong's third batch of tokenized green bonds is about to debut! Hong Kong government: ETFs and government bonds will be on the blockchain in the future

On July 5, Hong Kong Treasury Secretary Paul Chan publicly revealed that the Hong Kong government will fully launch the "asset tokenization" strategy, prepare to issue the third batch of "tokenized green bonds", and launch a new version of the "Digital Asset Development Policy Declaration 2.0". The goal is to make Hong Kong the world's most open and secure digital asset center in Asia.

The third batch of tokenized green bonds is about to be launched, expanding the diversified applications of precious metals and green energy

At the "Hong Kong Digital Finance Awards 2025" award ceremony, Xu Zhengyu pointed out that the Hong Kong government has issued two batches of tokenized green bonds in 2023 and 2024 , and achieved initial success. These bonds are registered and settled through distributed ledger technology (DLT).

The following are the main features and innovative highlights of the first two batches of tokenized green bonds:

1. The first batch: covers primary market issuance, secondary market settlement and coupon payment, with the entire process on-chain and a trial of automatic redemption upon maturity.
2. The second batch: issued in a "digital native" manner, without the need for a traditional custodian, supports ICMA bond classification (BDT), green bond disclosure documents can be viewed on the digital asset platform, and T+1 fast settlement; issued through the HSBC Orion platform, CMU is responsible for settlement, and is connected with Euroclear and Clearstream.

He further stated that the government has begun preparing for the third batch of tokenized green bonds, targeting the diversified applications of precious metals, non-ferrous metals and renewable energy (such as solar panels). In the future, it is hoped that this "on-chain bond issuance" model will become a normal financing tool for the Hong Kong government.

Tokenization is implemented in three stages, and both ETFs and bonds can be put on the chain

Xu Zhengyu added that starting from 2023, the Hong Kong government has promoted the tokenization of financial assets in three phases. The first phase targets "bank assets", the second phase is "government funds", and the third phase is "market instruments". He gave an example that in the future, government bonds and ETFs can be issued in tokenized versions, allowing assets to be directly put on the chain. Tax incentives including tokenized ETFs are also being studied, such as exemption from stamp duty.

The regulatory framework emphasizes the balance between innovation and risk control, and the bill is in the process of legislation.

In addition to promoting tokenization, Xu Zhengyu also emphasized that digital asset trading platforms and virtual asset issuance (such as stablecoins) also need to be regulated by legislation. He revealed that the Hong Kong government is currently drafting relevant provisions and hopes to submit them to the Legislative Council as soon as possible to implement a regulatory framework that takes into account both innovation and risk control.

He added that the regulatory direction will emphasize three points:

1. Effectively manage risk
2. Enhanced transparency
3. Ensure investor protection

So that Hong Kong can become one of the most trusted markets for digital assets in the world.

Digital Asset Policy 2.0 is launched, stablecoin supervision and tokenization applications are fully launched

Last week, the Hong Kong government also officially released the Digital Asset Development Policy Declaration 2.0 , which includes four core directions:

1. Legal and regulatory streamlining
2. Expanding the suite of tokenised products
3. Advancing use cases and cross-sectoral collaboration
4. Talent training (People and partnership development)

The overall plan is integrated into the "LEAP" framework. Stablecoin will become the focus of supervision. The Hong Kong government is expected to launch a licensing system for stablecoin issuers on August 1, with practical applications as the main orientation.

Recently, the cryptocurrency exchange OKX has frequently implemented risk control measures, causing dissatisfaction in the community. Many users reported that their accounts were frozen without warning, and even after completing the complicated KYC process and supplementing the documents, they still could not be unlocked. CEO Star Xu also personally apologized for this. Behind the scenes, it was reported that OKX was conducting a large-scale "risk and doubt cleanup" in order to go public in the United States or cooperate with the tightening of European regulations.

OKX's multiple users were subject to risk control, and Star Xu personally apologized: the misjudgment rate is still high

Over the weekend, several OKX users posted on X that their accounts had been frozen multiple times. Even after completing identity verification and submitting work records and employer information for the past 10 years, they were still unable to retrieve their funds, sparking criticism from the community.

In response, OKX CEO Star publicly apologized , admitting that the system has a "high rate of false positives" and that even if users are compliant, they may still be subject to risk control measures due to misjudgment by algorithms and data models:

OKX is working hard to optimize the review process and user experience, but it is undeniable that misjudgments cannot be completely eradicated in any compliance system. We will continue to optimize the user experience of the data submission process.

He said, "If users are asked to provide information such as source of funds, proof of address, previous work units, etc., please submit it truthfully. As long as users do not engage in illegal activities, the security of your account and funds will not be affected."

Listing in the US or tightening of the EU? OKX’s risk control upgrade has its reasons

Market observer AB Kuai.Dong pointed out that the intensified risk control measures of OKX may be related to two major changes:

1. The plan to go public in the United States is accelerating : It was previously reported that OKX was preparing for an IPO in the United States, and the US regulatory authorities have extremely high requirements for KYC and source of funds review of crypto platforms. Referring to the compliance pressure faced by Didi Chuxing during its listing and delisting , it may be understandable that OKX is now taking frequent risk control actions.

2. Malta tightens regulation : In the past, many exchanges obtained EU MiCA licenses through Malta. However, according to CoinDesk, Malta’s regulatory attitude has recently become stricter and retrospective inspections have begun, which may be triggering a wave of exchanges supplementing documents.

Therefore, the platform has conducted a comprehensive upgrade review of cross-border VPN users, accounts associated with sanctioned regions, accounts that have interacted with Dark Web browsers, and those whose loan funds are of unknown origin. Even employees with traditional financial backgrounds have been interviewed and resigned , seemingly to prevent regulatory organizations from conducting background checks on employees. This move shows that this wave of risk control is not only aimed at retail investors, but also at higher-level policy implementation.

( Regulatory relaxation triggers a wave of IPOs on exchanges: Who can replicate CRCL's growth and become the next doubling stock? )

Is lending for cryptocurrency trading a high-risk strategy? Star: Not recommended, not supported

What caused controversy was that Star Xusaid that he did not welcome loan users, which indirectly reflected the fact that OKX intended to clear out users who used loan funds to speculate in cryptocurrencies. User @linwanwan823 analyzed that there were two core considerations behind this:

• Political and regulatory risks : In traditional financial institutions, once loan funds flow into high-risk speculative markets such as cryptocurrencies, they may be blamed by regulators. Especially when some countries enter a "tight fiscal period", the review of the use of funds will become more stringent.

• Impact on the path to listing : If OKX is found to have a large number of users taking out loans to speculate in cryptocurrencies, it may have a serious negative impact on its IPO. Even Coinbas made a lot of adjustments to its KYC process before its listing.

( FATF Virtual Asset Anti-Money Laundering Standards Progress Report: 75% of Jurisdictions Have Not Done Well, Criminal Abuse Is Rampant )

There is no middle ground? Why not let the suspicious users withdraw their funds themselves?

Crypto KOL @BroLeonAus pointed out that he understands the sacrifices Star made to get OKX listed, and even forced users to accept it despite the public complaints about risk control. But he also stated that compliance itself has no upper limit, and regulators certainly think that the stricter the better:

I think we cannot blindly believe the regulator's words. Otherwise, we may go too far, the business department will not be able to continue, and there will be a large number of users left, but they don't care about this result.

On the other hand, many users also questioned that if the platform determined that the source of funds was suspicious, why didn’t it allow users to withdraw the funds directly and leave, but instead repeatedly froze and delayed the process and put the user into an infinite loop of submitting additional documents?

The author believes that the flow of these suspicious funds may also be investigated by regulators. If the platform allows suspicious users to withdraw funds, it may also be involved in criminal liability, just like its previous DEX incident.

( OKX Web3 suspends DEX aggregator services: actively responding to hacker attacks and EU MiCA regulatory pressure )

Compliance tightening is endless, will DEX become a safe haven in the future?

This incident has once again triggered reflections on the risks of centralized exchanges (CEX). Under the pressure of risk control and compliance, CEX would rather kill 3,000 people by mistake than let one person go, and this is precisely the opportunity for the development of decentralized derivatives exchanges (Perp DEX). @BroLeonAus also linked Binance founder CZ to the DEX Aster he promoted.

( Perp DEX's Technological Innovation and Market Competition: A Brief Discussion on the Opportunities and Challenges of On-chain Perpetual Contract Exchanges )

Although DEX still has operational thresholds and liquidity challenges, in the face of tightening compliance and complaints about risk control, it may become the next wave of safe havens for users.