Hong Kong Releases New Policy to Promote Digital Asset Development, Aiming to Become a Global Leading Center

The Government of the Hong Kong Special Administrative Region released the "Hong Kong Digital Asset Development Policy Declaration 2.0" on June 26, demonstrating its firm determination to build a globally leading digital asset center. The declaration aims to create a reliable market environment that is controllable in terms of risk, thriving in innovation, and brings substantial benefits to the real economy and financial markets.

The release of this declaration coincides with Singapore tightening its related policies. Industry insiders believe that Singapore's influence in the Web3 sector may gradually diminish in the coming years. In contrast, Hong Kong is being viewed as the next Web3 hub, and its development prospects are highly regarded.

The declaration proposes a series of strategic policy directions and implementation measures to create a digital asset ecosystem that is deeply integrated with the real economy and financial markets, oriented towards the future. These measures are framed by "LEAP" and include optimizing legal and regulatory frameworks, expanding the variety of tokenized products, promoting application scenarios and cross-sector cooperation, as well as talent and partner development.

In terms of regulation, the declaration proposes to conduct public consultations on the licensing mechanism for digital asset trading service providers and custodial service providers. The Securities and Futures Commission will become the main regulatory authority responsible for licensing, registration, and setting standards, while the Hong Kong Monetary Authority will oversee relevant activities of banks.

The government also plans to regularize the issuance of tokenized government bonds and explore different currency and maturity arrangements. In addition, the stamp duty exemption for exchange-traded funds (ETFs) will apply to tokenized ETFs to promote market development. The government will also consider including designated digital assets within the scope of qualified transactions eligible for profit tax exemptions.

In supporting stablecoins and other tokenized projects, the government will explore the use of stablecoins as a payment tool and welcomes market participants to propose suggestions on how the government can experiment with and utilize licensed stablecoins. The Cyberport will launch a blockchain and digital asset pilot funding program to provide funding and support for promising projects.

The Financial Secretary of Hong Kong, Paul Chan, emphasized that digital assets are an important component of financial technology, with significant growth potential. He stated that by combining prudent regulation and encouraging market innovation, Hong Kong will build a more prosperous digital asset ecosystem that integrates with the real economy and social life.

The Director of the Financial Services Bureau, Xu Zhengyu, pointed out that the "Policy Declaration 2.0" provides a clear roadmap for businesses and investors, helping to seize opportunities in a stable and thriving digital asset market.

Industry experts believe that Hong Kong's policy update has completed a "three-in-one" system loop of regulatory certainty, asset transparency, and tax competitiveness. These reforms not only support the development of Web3 but also represent an important measure to incorporate Web3 into financial infrastructure.