Hong Kong Digital Asset Sector Upgrades Again: "Policy Declaration 2.0" Focuses on Stablecoins and Physical Asset Tokenization

The Hong Kong Special Administrative Region Government recently released the "Hong Kong Digital Asset Development Policy Declaration 2.0," further refining the deployment and proposing specific implementation measures based on the first policy declaration in October 2022. The new version of the policy declaration places greater emphasis on practical application and ecosystem construction, reiterating Hong Kong's commitment to becoming a global center for digital asset innovation.

"LEAP" Framework: Four Key Directions

The new policy declaration introduces the "LEAP" framework, focusing on four core directions:

1. Optimize laws and regulations: Build a comprehensive regulatory framework for digital asset service providers, covering trading platforms, stablecoin issuance, trading services, and custody services. The Securities Regulatory Commission will become the main regulatory authority responsible for the relevant licensing mechanisms.

2. Expand the variety of tokenization products: Promote the normalization of government bond tokenization and provide incentives for the tokenization of physical assets. Encourage tokenized exchanges to trade funds in the secondary market and promote the tokenization applications of assets and financial instruments.

3. Promote application scenarios and cross-border cooperation: The stablecoin issuer licensing mechanism will be implemented on August 1. Strengthen cooperation among regulatory agencies, law enforcement, and technology providers to develop digital asset infrastructure.

4. Talent and Partner Development: Collaborate with the industry and academia to promote talent cultivation and establish Hong Kong as a center for digital asset knowledge sharing and international cooperation.

System Upgrade: Stablecoins and Tokenization of Physical Assets Become the Focus

Industry experts point out that the "Policy Declaration 2.0" represents a systematic upgrade, mainly reflected in three aspects:

1. Stablecoins under regulation: The stablecoin licensing system will officially be implemented on August 1, 2025, providing a legal operating space for stablecoins.

2. Tokenization of physical assets becomes a key industry: The government promotes the normalization of bond issuance and plans to include gold, green energy, and electric vehicle assets in the scope of tokenization.

3. Tokenization ETFs and digital asset funds enjoy tax benefits: they may have stamp duty and capital gains tax exemptions similar to traditional ETFs in the future.

Experts believe that stablecoins are evolving from "tool-like currencies" to "infrastructure currencies." New policies clarify the rules for the management of statutory reserves, redemption mechanisms, and risk prudential requirements for stablecoin issuers, endowing them with statutory and technical attributes, making them acceptable to banks, cross-border settlement systems, and the public sector.

Industry Development Trend: The Era of Digital Twin Has Arrived

Industry insiders point out that with the development of stablecoins and the tokenization of physical assets, the industry is transitioning from a "multi-chain prosperity" phase to a "main chain dominance" stage. In the future, there will be a greater focus on the quality of infrastructure competition, and blockchains capable of supporting the tokenization of physical assets and compliance mechanisms will have an advantage. This marks the arrival of the digital twin era, where real-world assets will be mapped and traded on the blockchain.

Institutions Actively Layout

Recently, several institutions have launched stablecoin and physical asset tokenization-related businesses in Hong Kong. Some listed companies and well-known technology firms have begun exploring the application for Hong Kong stablecoin licenses and are collaborating in the field of physical asset tokenization.

At the same time, the Hong Kong Securities and Futures Commission disclosed that 40 institutions have been approved to provide virtual asset trading services through comprehensive accounts. Several Chinese securities firms are also actively applying to upgrade their licenses related to virtual asset transactions.

Overall, the launch of the "Policy Declaration 2.0" marks significant progress for Hong Kong in the development of digital assets. With the regulatory framework becoming increasingly clear, tokenization products gradually taking shape, and institutions actively entering the market, Hong Kong is accelerating the construction of a robust, diverse, and sustainable digital asset ecosystem. The tokenization of physical assets and stablecoins are expected to become key growth areas in the next phase.