Hong Kong Digital Asset Development Policy Declaration 2.0 - Law Firm Interpretation

In June 2025, the Hong Kong SAR government issued the "Digital Asset Development Policy Declaration 2.0", which uses the tokenization of real assets (RWA) as an anchor to break through the barriers between traditional finance and digital assets, and uses compliant stablecoins as a fulcrum to leverage the payment system reform, and build an innovative paradigm of "digital assets serving the real economy". Hong Kong is trying to redefine the core competitiveness of an international financial center through tokenization technology.

1. Government-led tokenization: from experimental fields to mainstream markets

The core of Hong Kong's strategy is that the government personally promotes the implementation of tokenization technology to inject a shot in the arm to the market.

First, the tokenization of sovereign bonds is becoming routine. Based on the successful issuance of two batches of tokenized green bonds with a total amount of HK$6.8 billion, the government announced that it would normalize its issuance and explore multi-currency and multi-maturity structures. The goal is to provide the market with "stable and high-quality digital bonds" - this is not only a technical verification, but also a low-risk, high-credit anchor asset for global institutional investors.

Second, the tokenization infrastructure is being built. The HKMA's Ensemble project, jointly with the China Securities Regulatory Commission to build an inter-bank tokenized deposit settlement system to solve the pain points of capital circulation efficiency; HKEX Digital Asset Index : Launching the Asian time zone pricing benchmark for Bitcoin and Ethereum to provide a valuation reference system for tokenized assets.

Third, policy dividends are precisely distributed. Tax exemptions,It is clear that tokenized ETFs enjoy the same stamp duty exemption as traditional ETFs; promote legislation to include designated digital assets in the scope of profit tax exemption for private funds and family investments (effective in 2025/26). Incubation support,Cyberport launched the "Blockchain and Digital Asset Pilot Funding Program", giving priority to funding landmark projects such as RWA and payment clearing.

The government endorses tokenization technology with its own credit, and promotes tokenization from "experimental innovation" to "scalable commercial practice" through the triple punch of reducing compliance costs, providing infrastructure, and releasing fiscal and tax dividends, reflecting far-reaching policy intentions.

2. RWA Expansion: Redefining the Boundary of Asset Liquidity

The Declaration regards the tokenization of real-world assets as the core hub for connecting traditional finance and digital assets, and its layout is very forward-looking:

Hong Kong is no longer limited to the tokenization of financial assets, but has included physical income rights such as factory warehouse receipts, charging piles, and solar panels into the scope. In essence, it is rebuilding the mapping relationship between "real economy-financial assets" on the blockchain, creating liquidity for trillions of non-standard assets, and achieving a revolutionary breakthrough in promoting the integration of digital and real assets.

Third, the stable currency system: the "icebreaker" of the payment system reform

The "Stablecoin Issuer Supervision System" implemented on August 1, 2025 is a strategic weapon for Hong Kong to break through the traditional payment system.

First, strict supervision shapes market trust.The system requires penetrating supervision of reserve asset custody (must cover 100% of the circulation), stabilization mechanism (algorithmic stablecoins are excluded), redemption process (T+0 real-time settlement), and risk management (regular stress testing) to completely solve the trust crisis of stablecoins.

Second, the government personally promotes the implementation of scenarios. Openly solicit government scenario application solutions (such as tax payment, subsidy issuance), and use public payment as a breakthrough to establish usage inertia.  Focus on supporting cross-border trade settlement scenarios to solve the pain points of high exchange rate losses and long settlement cycles for small and medium-sized enterprises.

Third, form strategic synergy with tokenization. Payment-settlement integration, that is, using stablecoins to settle tokenized bond interest and RWA income distribution, to achieve a closed loop of "asset generation-cash flow distribution".  Cross-border arbitrage elimination, that is, companies can use stablecoins to directly pay LME tokenized metal warehouse receipts to avoid multiple currency conversion costs.

If Hong Kong's compliant stablecoins are successfully used in cross-border trade, government payments, and DeFi clearing scenarios, they will directly challenge the payment intermediary status of SWIFT and traditional commercial banks. Its core advantages lie in cost compression (reduced by more than 50% compared with traditional cross-border payments) and efficiency leap (settlement is accelerated from T+2 to T+0), which will produce disruptive changes.

Fourth, the integration path of traditional finance and digital assets

Hong Kong's innovation lies in building a three-in-one integration paradigm of "traditional assets-tokenization-stablecoin circulation":

The first is the institutional entry channel. By tokenizing high-credit assets such as government bonds and LME warehouse receipts, conservative financial institutions are attracted to enter the market. The China Securities Regulatory Commission has unified custody standards (banks are supervised by the Hong Kong Monetary Authority) to resolve institutional clients’ concerns about private key management risks.

Second, liquidity tiered design

Third, it is a new cross-border financial hub.Relying on stablecoins + tokenized assets, Hong Kong can provide: African mining companies → Hong Kong LME warehouse receipts tokenization → Southeast Asian factories stablecoin payments.  Middle East sovereign funds → subscribe to Hong Kong tokenized green bonds → collect on-chain stablecoin interest. Such services will reshape Hong Kong's new role as a global digital asset liquidity hub in addition to the offshore RMB center.

V. Risks and challenges: unfinished questions of the Hong Kong solution

Although the path is clear, Hong Kong still needs to face three major challenges.

First, there is a gap in legal adaptability. Current relevant laws, such as the "Bills of Exchange Ordinance" and the "Sale of Goods Ordinance", do not clearly define "tokenized asset ownership". Although the Treasury Bureau and other institutions have initiated legal reviews, the law revision cycle may lag behind market innovation.

Second, there is resistance to the coordination of financial institutions. Traditional banks have a certain degree of conflict of interest with blockchain in tokenized deposits and stablecoin clearing business (such as reducing cross-border payment income). The Ensemble project needs to balance disruptive innovation and vested interests.

Third, there are geopolitical variables. Cross-border stablecoin payments may need to carefully handle the competitive relationship with the mainland's digital RMB (e-CNY), and coordinate and connect relevant policies and technologies.

Six. The “Hong Kong Experiment” of reconstructing the financial value chain

The essence of the “Policy Declaration 2.0” is a financial engineering revolution led by state power.

On the asset side, bonds, commodities, new energy and other real economic elements are transformed into on-chain liquidity through RWA tokenization;

on the payment side, compliant stablecoins are used to break through traditional cross-border settlement barriers;

on the ecological side, tax incentives and infrastructure investment are used to reduce market innovation costs.

Hong Kong's strategic goal is not only to become a "digital asset center", but also to use tokenization as a tool to reconstruct the value chain of global asset issuance, trading and clearing. If it successfully opens the closed loop of "real assets → on-chain tokens → stablecoin circulation", a new digital financial network parallel to the traditional financial system will be born. We believe that this will determine whether Hong Kong can continue its position as an international financial hub in the blockchain era, and will provide the world with the best practice case of "digital migration of traditional financial system".

Official link network of "Hong Kong Digital Asset Development Policy Declaration 2.0" of the Hong Kong Special Administrative Region Government of China: https://gia.info.gov.hk/general/202506/26/P2025062500847_500091_1_1750909590100.pdf