Hong Kong releases Policy Declaration 2.0 to build a global digital asset innovation center.

On June 26, news came that the Hong Kong SAR government published the "Hong Kong Digital Asset Development Policy Declaration 2.0" (referred to as "Policy Declaration 2.0"), reaffirming the government's commitment to making Hong Kong a global innovation center in the field of digital assets.
The "Policy Declaration 2.0" proposes a "LEAP" framework, which includes legal and regulatory streamlining, expanding the suite of tokenised products, advancing use cases and cross-sectoral collaboration, and people and partnership development.
The content of "Optimizing Legal and Regulatory" shows that the Hong Kong government is building a unified and comprehensive regulatory framework for digital asset service providers, covering digital asset trading platforms, stablecoin issuers, digital asset trading service providers, and digital asset custody service providers.
The "Policy Declaration 2.0" clarifies that the Hong Kong Securities and Futures Commission is the main regulatory authority for digital asset trading service providers, responsible for licensing and registration matters, setting standards, optimizing regulatory processes, and reducing potential regulatory arbitrage under different digital asset regulatory frameworks; the Hong Kong Monetary Authority will act as the frontline regulatory body for banks, overseeing their digital asset trading activities.
In the "Promoting Application Scenarios and Cross-Industry Cooperation" section, the "Policy Declaration 2.0" supports stablecoins and other tokenized projects, including exploring the use of stablecoins as a payment tool.
The "Policy Declaration 2.0" points out that stablecoins provide a cost-effective alternative outside the traditional system, with the potential to revolutionize payments, supply chain management, and capital market activities. The Hong Kong government will implement a regulatory framework for stablecoin issuers starting from August 1, 2025, establishing relevant requirements for reserve asset management, stabilization mechanisms, redemption processes, and prudent risk management.
The "Policy Declaration 2.0" shows that many enterprises involved in cross-border trade and settlement business have expressed strong interest in using stablecoins to reduce costs and speed up transaction processes. To fully realize the potential of stablecoins, the government and regulatory authorities will provide a favorable market environment and necessary regulatory guidance to promote research and implementation plans by licensed stablecoin issuers in Hong Kong, in order to address substantial pain points in economic activities. The Hong Kong government welcomes market participants to propose suggestions on how to experiment with and use licensed stablecoins, such as for enhancing the efficiency of government payments.
In addition, Cyberport will launch a pilot funding program for blockchain and digital assets, providing funding for applicant projects with future application potential, iconic status, and market impact.
The following is the full text of the "Policy Declaration 2.0":
Hong Kong Digital Asset Development Policy Declaration 2.0
Vision: Build a trusted and innovative digital asset center.
The Government of the Hong Kong Special Administrative Region is firmly committed to building Hong Kong into a leading global digital asset center—a market that fosters innovation in a controlled risk environment, brings substantial benefits to the real economy and financial markets, and is trustworthy.
The "Hong Kong Digital Asset Development Policy Declaration 2.0" ("Policy Declaration 2.0") issued by the Financial Services and the Treasury Bureau ("FSTB") is a proactive response from Hong Kong to the continuous evolution of the global digital asset market. Upholding the principle of "same business, same risks, same rules," the "Policy Declaration 2.0" aims to outline forward-looking strategies, empower industry development, promote inclusive finance, cultivate talent, while safeguarding investors and maintaining financial security, thereby consolidating Hong Kong's leading position as an international financial center.
"LEAP": Moving towards the formation of a trustworthy, sustainable, and deeply integrated digital asset ecosystem in the real economy.
Based on the measures proposed in the first "Policy Declaration" issued in October 2022, including establishing robust regulation, launching innovative products such as digital asset exchange-traded funds ("ETFs"), expanding investor channels by allowing retail participation, and initiating experimental projects like green bond tokenization, Hong Kong is now ready to move towards the formation of a trustworthy, sustainable, and deeply integrated digital asset ecosystem in the real economy, referred to as "LEAP". The Securities and Futures Commission ("SFC") previously announced the "ASPIRe" roadmap, aimed at guiding the Hong Kong digital asset ecosystem into the future amidst a constantly changing environment, implementing a series of measures such as adaptive compliance and product frameworks (like derivatives trading) to strike a balance between investor protection and market competitiveness. "Policy Declaration 2.0" outlines the next phase of development, focusing on enhancing the liquidity of digital asset trading and promoting a more diverse supply of digital asset products to strengthen Hong Kong's position as a global digital asset hub. The government and regulatory agencies also welcome high-quality digital asset service providers from around the world to participate in the market to promote liquidity and healthy, orderly competition.
To achieve this vision and goal, and to create a digital asset ecosystem that is deeply integrated with the real economy and financial markets, and is future-oriented, we propose a series of strategic policy directions and will implement corresponding measures. In formulating policy directions and measures, we strive to ensure that they are not limited by current technologies and can adapt to the future development of digital assets while integrating into the real economy and financial systems to achieve sustainable growth. These measures are framed by "LEAP" which stands for - ("L"egal and regulatory streamlining) optimizing legal and regulatory frameworks, ("E"xpanding the suite of tokenised products) expanding the variety of tokenised products, ("A"dvancing use cases and cross-sectoral collaboration) advancing application scenarios and cross-departmental collaboration, and ("P"eople and partnership development) talent and partnership development, to build a trustworthy, innovative, and vibrant digital asset ecosystem, enhancing Hong Kong's leading position in the global financial landscape.
("L"egal and regulatory streamlining) Optimize legal and regulatory
(a) A unified and comprehensive regulatory framework
Building on the progress made since 2022, the government will continue to collaborate with regulators and industry stakeholders to develop a comprehensive legal and regulatory framework governing digital assets, ensuring the sustainable and responsible development of Hong Kong's digital asset ecosystem. This system covers digital asset exchanges, stablecoin issuers, digital asset trading service providers, and digital asset custody service providers, with a focus on investor and consumer protection. The next key measure is to conduct public consultations on the licensing mechanism for digital asset trading service providers and digital asset custody service providers, to meet the demand of investors seeking high liquidity, large-volume transactions, and secure custody of assets. The government proposes designating the Securities and Futures Commission as the primary regulator for digital asset trading service providers, responsible for licensing and registration matters, setting standards, optimizing regulatory processes, and reducing potential regulatory arbitrage under different digital asset regulatory frameworks. The Hong Kong Monetary Authority ("HKMA") will serve as the frontline regulator for banks, overseeing their digital asset trading activities.
Similarly, the Securities Regulatory Commission will serve as the main regulatory authority for digital asset custody service providers, responsible for licensing and registration, as well as setting standards, while the Monetary Authority will act as the frontline regulatory body for banks, overseeing their digital asset custody activities.
This unified and comprehensive regulatory arrangement will enhance market credibility, promote broader digital asset activities and large transactions, and provide clear guidance for market participants. This arrangement will also support effective risk management and provide liquidity, ensuring the establishment of a balanced ecosystem to foster market innovation and protect investors. Regular reviews and close communication with stakeholders will be conducted to ensure that the framework can adapt to technological and market developments.
At the same time, Hong Kong will continue to implement international standards related to digital assets, including the International Organization of Securities Commissions' "Recommendations on Crypto and Digital Asset Market Policy", the Financial Stability Board's "Global Regulatory Framework for Crypto Asset Activities", the Basel Committee on Banking Supervision's "Prudent Treatment of Crypto Asset Risk", and the Organisation for Economic Co-operation and Development's "Framework for the Reporting of Crypto Assets" to promote tax transparency.
(b) Review of Tokenization Laws and Regulations
The tokenization of real-world assets and financial instruments provides opportunities for the integration of new technology with traditional finance, which can drive innovation in economic activities and financial market structures, thereby enhancing efficiency, reducing costs, increasing transparency, and promoting investor participation. To fully realize this potential, clear, explicit, and convenient legal and regulatory frameworks are essential. The Financial Services and the Treasury Bureau and the Monetary Authority will lead a review of the relevant legal and regulatory frameworks, referencing international experiences and practices, to facilitate the further application of tokenization in Hong Kong. The initial review will focus on the bond market, which has already passed the concept validation stage, and is also expected to provide references for the tokenization of other real-world assets and financial instruments. The review will comprehensively examine the issuance and trading processes of tokenized bonds, including but not limited to settlement, registration, and record-keeping requirements. During the review process, the government will collaborate with legal experts and industry stakeholders to ensure that the review results and related improvement recommendations are practical and meet future development needs, positioning Hong Kong as a pioneer in this innovative field.
("E"xpanding the suite of tokenised products) Expanding the variety of tokenised products
(c) Regularization of tokenized government bond issuance
The government has issued tokenized green bonds twice (with a total amount of approximately HKD 6.8 billion), proactively demonstrating the benefits of the tokenization scheme. On this basis, the government will regularize the issuance of tokenized government bonds and explore different currency and maturity arrangements, as well as other innovative options. The government hopes to provide the market with stable and high-quality digital bonds through this initiative, further expanding accessibility and attracting a broader range of investors. To further leverage the advantages of tokenization, the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority will continue to communicate with industry experts to understand various aspects of the market's opinions, including the incorporation of digital currencies to enhance trading efficiency, secondary market trading application scenarios, and further expanding investor participation in the local bond market. The government aims to establish a global benchmark by being the first to issue tokenized bonds and regularizing them, enhancing market confidence in the technology while encouraging adoption by both public and private sectors.
(d) Provide incentives for the tokenization of real-world assets and financial assets
The tokenization of real-world assets and financial market instruments can enhance the efficiency, accessibility, and potential liquidity of the Hong Kong market. Through the HKMA's Ensemble project (in which the SFC is a key partner and jointly leads the participation of the asset management industry with the HKMA), it actively encourages innovative application scenarios, including the tokenization of traditional financial products (such as money market funds and other funds) as well as the revenue streams of real-world assets (such as electric vehicle charging stations). The HKMA is exploring the establishment of the Ensemble infrastructure to facilitate the settlement of interbank tokenized deposits, aiming to simplify processes and enhance liquidity.
The London Metal Exchange (LME) has included Hong Kong as a licensed delivery location within its global warehouse network and has approved warehouse operators in Hong Kong to store metals registered with the LME. To further develop the commodity trading ecosystem, the government encourages the market to apply tokenization and physical asset tracking technology in warehousing programs. Token creation technology can serve as an identification label for global warehouses, assisting in tracking metal assets and related data such as their sustainability, promoting Hong Kong's further integration into the global warehouse network.
The government will strengthen efforts to expand tokenization programs, promoting the tokenization of a wider range of assets and financial instruments, showcasing the diverse applications of this technology across different sectors, including precious metals (such as gold), non-ferrous metals, and renewable energy (such as solar panels).
Currently, all exchange-traded funds (ETFs) listed on the Hong Kong Stock Exchange are exempt from stamp duty upon transfer. To promote the development of the tokenized market, the government will clarify that this exemption from stamp duty also applies to tokenized ETFs. Based on this exemption, the government welcomes market participants to explore the advantages of tokenizing ETFs, such as money market ETFs, including introducing them for secondary market trading on licensed digital asset trading platforms or other platforms. Looking ahead, the government will maintain an open attitude, considering factors such as fiscal impact and market development, to review the tax arrangements for the transfer of other Securities and Futures Commission-recognized funds through tokenization.
The government will submit legislative proposals to include specified digital assets in qualified transactions that are eligible for profits tax exemption for private placements of funds and family investment control tools. If the proposal is passed by the Legislative Council, the tax exemption will take effect from the 2025/2026 tax year.
(“A”dvancing use cases and cross-sectoral collaboration) Promote application scenarios and cross-departmental collaboration
(e) Supports stablecoins and other tokenized projects, including exploring the use of stablecoins as a payment tool.
Stablecoins provide a cost-effective alternative outside of traditional systems, with the potential to revolutionize payments, supply chain management, and capital market activities. The government will implement a regulatory regime for stablecoin issuers starting August 1, 2025. This regime sets forth proper requirements for reserve asset management, stabilization mechanisms, redemption processes, and prudent risk management, serving as the cornerstone for achieving the aforementioned vision. These regulatory requirements help ensure the stability and credibility of stablecoin issuance, enhancing its reliability for use both locally and internationally. Many businesses engaged in cross-border trade and settlement have expressed strong interest in using stablecoins to reduce costs and accelerate transaction processes. To fully realize the potential of stablecoins, the government and regulatory bodies will provide a favorable market environment and necessary regulatory guidance to promote Hong Kong licensed stablecoin issuers in researching and implementing solutions across different application scenarios, addressing substantive pain points in economic activities. To demonstrate government support and take the lead, market participants are encouraged to propose suggestions on how the government can experiment with and utilize licensed stablecoins, such as enhancing the efficiency of government payments.
(f) Promote cooperation among regulatory authorities, law enforcement agencies, and technology providers.
As a digital technology incubator in Hong Kong, Cyberport has been actively supporting tokenization projects in Hong Kong and providing a thriving environment for startups to explore innovative fintech solutions through its collaboration with the Monetary Authority on the Ensemble project. To further support the development of tokenization projects, Cyberport will collaborate with relevant stakeholders in the digital asset industry, leveraging its incubation ecosystem to provide support, including business matching opportunities, technical support, industry expert guidance, and participation in accelerator programs related to digital assets and Web3. Startups and companies engaged in tokenization solutions will benefit from dedicated resources that enable them to experiment with innovative ideas and commercialize them. Cyberport will also launch a blockchain and digital asset pilot funding program to provide funding for applications that have future application potential, are iconic, and have market impact. In addition to funding, Cyberport will assist these companies and coordinate with relevant stakeholders to support the implementation of pilot projects as needed.
The dedicated team of the Invest Hong Kong welcomes and is ready to support digital asset service providers in establishing and expanding their business in Hong Kong. Among the many supports available, the Invest Hong Kong can help potential digital asset service providers connect with banks and various professional and support services, and facilitate their business establishment.
Hong Kong Exchanges and Clearing Limited has developed Hong Kong's first digital asset index to provide investors with a transparent and reliable benchmark for Bitcoin and Ethereum prices in the Asia timezone, supporting Hong Kong's development as a leading digital asset center in Asia.
To maintain market integrity and enhance trust in the digital asset system, the government will encourage the development of digital asset infrastructure, including but not limited to various regulatory technologies, cybersecurity, and monitoring solutions with local experience and deep regional expertise. These tools will strengthen Hong Kong's regulatory framework and capabilities, promoting the secure and sustainable development of digital assets. The government will promote cooperation between technology providers, regulatory agencies, and law enforcement agencies to optimize these solutions, ensuring they meet the specific needs of Hong Kong's digital asset ecosystem.
(“P”eople and partnership development) Talent and partner development
(g) Collaborate with market participants and universities to promote talent development
The government will continue to encourage training and talent development in the digital asset industry, with a particular focus on blockchain applications, artificial intelligence integration, and digital asset innovation, to nurture local talent, attract global digital asset professionals to Hong Kong, and support the development of startups and financial institutions. The first talent list published in 2018 has included fintech professionals, including digital asset professionals from around the world. Next, Cyberport will assist the government in achieving this goal through relevant measures in Web3, blockchain, and artificial intelligence technology training, thereby building a stable reserve of professional talent, continuously promoting innovation, and contributing to the local digital asset industry. These measures include experience-sharing sessions and collaboration with global digital asset companies to provide cutting-edge knowledge for the talent pool.
(h) Position Hong Kong as a center of excellence for knowledge sharing and promote collaboration with other jurisdictions.
The government will promote strategic cooperation between universities and the industry to connect academic research with the practical application of digital assets. Joint research programs will focus on developing new blockchain applications, tokenization frameworks, monitoring, and AI-driven financial tools, among others. By involving students in digital asset projects, these collaborations will nurture a new generation of entrepreneurs, researchers, and technical experts, ensuring the continuous flow of creativity and expertise. By combining academic achievements with industry needs, a sustainable talent pool will be established in Hong Kong to support the goals in the development of digital assets.
The government will strengthen cooperation between regulatory agencies and law enforcement agencies, coordinate the work of local regulatory and law enforcement agencies, and support the development of a transparent, secure, and resilient digital asset market. The government will also support and participate in international cooperation with regulatory agencies through relevant international organizations and establish memoranda of understanding with regulatory agencies and other government agencies from other jurisdictions to achieve information sharing and regulatory cooperation in the digital asset field. At the same time, the government will ensure cooperation between departments through existing high-level internal mechanisms.
Summary: A future of integration, innovation, confidence, and opportunities
The "Policy Statement 2.0" represents Hong Kong's determination to LEAP towards becoming a global leader in the digital asset space. Through a unified regulatory framework, legal and regulatory reviews, the regularization of tokenized government bond issuance, the tokenization of real-world assets and financial products, the promotion of stablecoin application scenarios, the strengthening of regulatory cooperation, and the advancement of international collaboration, the government is laying the groundwork for further innovation and market development. Together with a thriving ecosystem supported by training and project assistance, collaboration between universities and the industry, as well as digital asset infrastructure, Hong Kong will create significant benefits for the global real economy and financial markets. With the joint efforts of regulators, the industry, and society, a future that integrates innovation, confidence, and opportunities will be built, leading Hong Kong towards a new realm of global digital asset leadership.
Financial Services and the Treasury Bureau Hong Kong Special Administrative Region Government June 26, 2025 #BTC再创新高#