LCQ1: Policy on the development of digital assets
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Question:
To establish Hong Kong as a global hub for innovation in the digital asset field, the Policy Statement 2.0 on the Development of Digital Assets in Hong Kong issued last year introduced the "LEAP" framework focusing on: (i) legal and regulatory streamlining; (ii) expanding the suite of tokenised products; (iii) advancing use cases and cross-sectoral collaboration; and (iv) people and partnership development. In this connection, will the Government inform this Council:
(1) of the latest developments in the aforesaid four areas; as there are views pointing out that the professional talent bottleneck faced by the Web 3.0 industry has limited its pace of development, of the Government's corresponding policies to nurture and recruit relevant talents;
(2) as there are views that Web 3.0 assets differ significantly from traditional financial products in terms of valuation and risk management, of the policy initiatives put in place by the authorities to avoid excessive regulation while managing risks, and at the same time promote the development of more related businesses in Hong Kong in response to the rapid global development of tokenisation; and
(3) as some members of the industry have pointed out that while local virtual asset trading platforms have offered a number of mainstream trading services, their offerings remain distinct from those of major international platforms, whether the authorities have plans to attract such international platforms to establish a presence in Hong Kong; if so, of the details; if not, the reasons for that?
Reply:
President,
The Financial Services and the Treasury Bureau (FSTB) issued the Policy Statement 2.0 on the Development of Digital Assets in Hong Kong (Policy Statement 2.0) in June 2025. The Policy Statement 2.0 reaffirms the Government's commitment to establishing Hong Kong as a global hub for innovation in the digital asset field, with a view to building a trusted, innovative and vibrant digital asset ecosystem and reinforcing Hong Kong's leading position in the global financial landscape.
Having consulted the Labour and Welfare Bureau, the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA) and Cyberport, my reply to the three parts of the question is as follows:
(1) and (2) Since the publication of the Policy Statement 2.0, the Government, together with the HKMA, the SFC, Cyberport and others, has been actively advancing various initiatives with the industry to progressively turn our policy vision into actual progress and market outcomes.
On legal and regulatory streamlining, we have continued to clarify compliance pathways, seeking to promote responsible innovation and robust market development while upholding risk management and investor protection. In particular, the Government and the SFC will introduce a bill into the Legislative Council by the end of this year to amend the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), expanding the existing regulatory regime for virtual asset (VA) trading platforms to encompass VA dealing, advisory, management and custody services. Additionally, the FSTB and the HKMA are advancing a legislative review to promote the wider application of distributed ledger technology (DLT) in the fixed income market and the digital asset sector.
On expanding the suite of tokenised products, the Government has regularised the issuance of tokenised government bonds, issuing the fourth batch of digital green bonds totalling around HK$20 billion in this September. This issuance features technological innovations, offering settlement options in tokenised central bank digital currency and tokenised deposits to further enhance the digital ecosystem, while taking the lead in the development of tokenised investment products.
To foster market development, the Government and financial regulators, as guided by the principle of "same activity, same risks, same regulation", adopt a risk-based and technology-neutral regulatory approach to promote the steady development of VA, tokenised investment products and their related businesses in Hong Kong. The relevant regulatory standards align with those of traditional financial services and securities, and at the same time are appropriately tailored to the characteristics of VA and tokenised investment products, thereby facilitating responsible industry innovation while ensuring adequate investor protection.
As at the end of September 2026, the SFC had authorised 13 tokenised money market funds, one tokenised gold investment product, two gold ETFs (exchange-traded funds) with tokenised classes, and one covered call ETF with a tokenised class. The assets under management of the tokenised classes of these 17 retail investment products amounted to approximately HK$10.3 billion. On October 26, with the SFC's approval, two SFC-authorised tokenised money market funds also commenced round-the-clock secondary market trading on licensed VA trading platforms.
On advancing use cases and cross-sectoral collaboration, following the implementation of the Stablecoins Ordinance (Cap. 656) last August, the HKMA granted two stablecoin issuer licences this April. The use cases of the relevant stablecoins are extensive, covering cross-border payments, local payments and tokenised asset trading, serving different types of users. In these use cases, stablecoins can enhance transaction efficiency and reduce transaction costs, thereby creating actual value for the real economy.
The Government also supported Cyberport in launching the Blockchain and Digital Asset Pilot Subsidy Scheme last June, successfully funding nine pilot projects spanning real-world asset tokenisation, payment and stablecoin infrastructure, security and risk management, and decentralised identity, etc. As of June, the Scheme had facilitated a total of HK$230 million in asset tokenisation, with six projects already put into commercial application. Recognising the substantial benefits the Scheme has brought to the market, the Government announced on November 2 to support Cyberport in launching the Scheme again, with applications opening on the same day.
Furthermore, the Government, through the EnsembleTX project co-led by the SFC and the HKMA, is driving the industry to explore the use of tokenised deposits in tokenised money market fund transactions to manage liquidity and funding needs in real time.
On people and partnership development, the Government has continued to promote talent training and development for the Web3.0 industry, with a particular focus on blockchain application and digital asset innovation, whilst striving to attract global digital asset professionals to Hong Kong. Notably, the Government has provided substantial funding support for Cyberport to develop the Web3.0 ecosystem. By collaborating with tertiary institutions, Cyberport offers physical and online courses, bootcamps, seed funds and internship opportunities, and has established the "Web3.0 Investors Circle" to drive talent nurturing, industry application and public awareness. As at the end of September 2026, related activities had brought together over 320 enterprises, and the courses had recorded over 7 000 enrollments, demonstrating remarkable results. In addition, digital assets and Web3.0 specialists can settle in Hong Kong through various pathways. Among them, the initial Talent List promulgated by the Government in 2018 already covered fintech professionals, enabling eligible incoming talents possessing relevant professional qualifications to enjoy additional immigration facilitation when applying to come to Hong Kong under the relevant schemes, providing impetus for financial innovation and its continuous development in Hong Kong.
(3) The Government and the SFC attach great importance to the quality of licensed VA trading platforms in order to properly manage risks and adequately protect investors. International VA trading platforms may apply to the SFC for a licence, provided that they meet the relevant statutory requirements and the SFC's regulatory requirements. The SFC and Invest Hong Kong have engaged with such international platforms to introduce Hong Kong's regulatory requirements and market opportunities. In fact, in recent years, the SFC has progressively broadened the scope of products and services that licensed platforms may offer, facilitated access to global liquidity, and permitted the development of more digital assets and tokenised products under appropriate safeguards. As mentioned above, the Government and the SFC will also soon introduce a bill into the Legislative Council to bring more types of VA services under the regulatory regime, facilitating a more diverse range of international service providers to commence business in Hong Kong. The Government and the SFC will continue to enhance the competitiveness of Hong Kong's digital asset market through clear regulation, talent and infrastructure development, as well as international co-operation.
Thank you, President.
Ends/Wednesday, November 4, 2026
Issued at HKT 12:30
Issued at HKT 12:30
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