As Hong Kong rolls out its stablecoin licensing regime and expands tokenization pilots, could this mark the beginning of a new chapter in global digital finance?
Limited Licenses First, Real-World Use Cases in Focus
With the Stablecoin Issuance Guidelines expected to take effect next month, Secretary for Financial Services and the Treasury Christopher Hui said the first phase will issue a limited number of licenses, prioritizing projects with real-world applications. He emphasized that cross-border stablecoins — especially those involving foreign currencies — will require coordination with relevant jurisdictions, leaving room for RMB-based stablecoin pilots.
The Hong Kong Monetary Authority (HKMA) is expected to announce detailed AML and licensing requirements later this month, aiming to issue the first batch of licenses by year-end.
Policy Signals Point to Cross-Border & Emerging Markets
The government is taking the lead in promoting stablecoins for cross-border payments and emerging market use, aiming to help developing countries tackle local currency devaluation and financial instability. According to InvestHK Director General Alphonsus Leung, several stablecoin operators are already in talks to set up in Hong Kong. He added that over 630 Mainland Chinese firms have landed in Hong Kong over the past 2.5 years—many seeking a launchpad for global expansion.
Meanwhile, the U.S. just passed the GENIUS Act (July 19), marking the first federal legislation to formally classify stablecoins as monetary instruments. The law mandates 1:1 reserves and public disclosures, signaling a maturing global compliance framework—potentially expanding Hong Kong’s room to innovate.
Tokenization: From Green Bonds to ETFs and Commodities
Beyond stablecoins, asset tokenization is another policy priority. Hui revealed that the government will continue to explore tokenized ETFs and metals, following the earlier pilot for green bond tokenization. The goal: to boost market efficiency and transparency.
So far this year, over 210 exchange-traded products (ETPs) have been listed in Hong Kong — spanning equities, bonds, commodities, and digital assets — signaling a growing convergence of traditional and digital finance.
Capital & Corporates Are Moving In: New Tokenized Funds, Web3 Giants Eye HK
The private sector is keeping pace. On July 17, China Asset Management Co., Ltd. (HK) launched two new tokenized money market funds — USD and RMB-denominated — adding to its existing HKD fund approved in February. This creates a complete series of tokenized currency funds, with the RMB fund being the world’s first of its kind. A notable milestone. Meanwhile, Web3 heavyweights like Animoca Brands have shown interest in developing stablecoin-related businesses in Hong Kong as regulatory clarity increases.
What Should Hong Kong Focus on Next?
As regulation falls into place and capital floods in, stablecoins and tokenized assets are rapidly shifting from concept to real-world use. Should Hong Kong double down on building cross-border payment infrastructure, or aim to become a global hub for asset tokenisation?
