Hong Kong Launches New Policy for Digital Asset Development to Create a Global Innovation Center

The Hong Kong SAR government recently released the "Hong Kong Digital Asset Development Policy Declaration 2.0", reaffirming its determination to establish Hong Kong as a global digital asset innovation center. This policy declaration builds on the first declaration from October 2022 and introduces the "LEAP" framework, focusing on improving legal regulations, expanding tokenized products, promoting application scenarios and cross-industry collaboration, as well as cultivating talent and developing partnerships. Its goal is to establish a reliable, sustainable digital asset ecosystem that is deeply integrated with the real economy.

"LEAP" Framework: Promoting the Integration of Digital Assets Innovation with the Real Economy

The "LEAP" framework clarifies Hong Kong's strategic direction in the digital asset space, seeking a balance between innovation and risk management, and providing a clear roadmap for businesses and investors. The framework includes four main aspects:

1. Improve laws and regulations

The Hong Kong government is working to establish a unified and comprehensive regulatory framework that covers digital asset trading platforms, stablecoin issuers, digital asset trading service providers, and custodial service providers. The Securities and Futures Commission will act as the main regulatory body responsible for formulating the relevant licensing mechanisms.

In addition, the relevant authorities will conduct a comprehensive review of the current laws to promote the tokenization of physical assets and financial instruments. This includes reviewing the settlement, registration, and record-keeping requirements for tokenized bond issuance and trading, aiming to provide clear legal guidance for market participants, reduce compliance costs, and protect investor rights.

2. Expand the types of tokenized products

The government plans to promote the tokenization of physical assets and enhance market liquidity and accessibility by regularly issuing tokenized government bonds and providing incentives. In the future, tokenized exchange-traded funds are expected to be traded in the secondary market through licensed digital asset trading platforms.

In addition to financial instruments, the government will also encourage broader asset tokenization across various sectors, including precious metals, non-ferrous metals, and renewable energy, showcasing the application potential of blockchain technology in different industries. This will further enrich the product variety in Hong Kong's digital asset market, attracting more institutional and individual investors to participate.

3. Promote application scenarios and cross-border cooperation

Hong Kong will implement a licensing mechanism for stablecoin issuers on August 1, 2025, providing regulatory support for the application of stablecoins in areas such as payments, supply chain management, and capital markets. The government welcomes market participants to propose innovative suggestions to explore more application scenarios.

At the same time, the government will strengthen cooperation among regulatory agencies, law enforcement departments, and technology providers to jointly develop digital asset infrastructure. The blockchain and digital asset pilot funding program launched by Hong Kong Cyberport will provide financial support for projects with potential and influence, encouraging enterprises to test blockchain and Web3.0 applications.

4. Cultivating talent and developing partnerships

To ensure the sustainable development of the digital asset ecosystem, the Hong Kong government will collaborate with the industry and academia to cultivate a new generation of entrepreneurs, researchers, and technical experts, establishing a sustainable talent pool. Hong Kong will position itself as an excellence center for digital asset knowledge sharing and international cooperation, promoting technological innovation and experience exchange through joint research programs and global regulatory collaboration.

Vision of Leadership and Hong Kong's Unique Advantages

The Financial Secretary, Paul Chan, emphasized that digital assets are an important component of financial technology. Blockchain technology enables efficient and low-cost financial transactions, making financial services more inclusive. The "Policy Declaration 2.0" showcases the government's vision for the development of digital assets, aiming to promote the diversification of tokenized application scenarios through practice, combining robust regulation with market innovation, and building a digital asset ecosystem closely integrated with the real economy and social life.

The Secretary for Financial Services and the Treasury, Hui Chengyu, added that Hong Kong's unique advantages give it a head start in driving the transition from traditional finance to the digital asset era. The "LEAP" framework in the "Policy Declaration 2.0" provides market participants with a clear roadmap, ensuring that Hong Kong remains competitive at the forefront of digital transformation and builds a trustworthy and sustainable digital asset market.

Hong Kong's Global Digital Asset Leadership

The "Policy Declaration 2.0" continues Hong Kong's proactive policies in the digital asset sector since 2022. Since the implementation of the licensing system for virtual asset trading platforms in June 2023, Hong Kong has granted licenses to multiple platforms, ensuring market transparency and investor protection. The "Stablecoin Regulation" passed in May 2025 further improves the regulatory framework, set to take effect on August 1, providing clear regulatory guidance for stablecoins pegged to fiat currencies.

Through the "LEAP" framework, Hong Kong is not only committed to local market innovation but also actively participates in global regulatory collaboration, attracting a large number of virtual asset-related companies expressing interest in establishing businesses in the region. The funding program of Cyberport and the reform of the licensing mechanism by the SFC will further lower market entry barriers, attracting more innovative companies to Hong Kong.

Conclusion

The "Hong Kong Digital Asset Development Policy Declaration 2.0" showcases Hong Kong's ambition and foresight in the digital asset field through the "LEAP" framework. With a robust regulatory environment, diverse application scenarios, and strong talent support, Hong Kong is progressing towards the goal of becoming a global innovation center for digital assets, injecting new momentum into the real economy while consolidating its unique advantages as an international financial center.