Hong Kong’s Bold Move in Digital Assets
In a bold move aimed at solidifying its stature as a premier global hub for digital assets, Hong Kong announced significant policy reforms during the 2026-27 Budget address by Financial Secretary Paul Chan. The comprehensive strategy includes the introduction of new licensing frameworks for digital asset platforms and custodians, thereby broadening the city’s regulatory scope to encompass more than just cryptocurrency exchanges. These reforms come in light of Hong Kong’s recent policy statement on digital assets, which aspires to establish a robust regulatory environment supportive of innovation while ensuring investor safety.
New Licensing Structures and Collaborations
To facilitate the growth of this sector, Chan revealed that a licensing structure for issuers of fiat-back stablecoins will be officially launched, with the first licenses expected to be issued as early as next month. The government plans to collaborate with those licensed entities to develop compliant and controlled applications in this area, transitioning from merely policy formulation to practical implementation.
Enhancing Market Liquidity and Innovation
Additionally, the Securities and Futures Commission (SFC) is set to enhance market liquidity for digital assets, particularly catering to professional investors. This includes expanding the spectrum of available products and instituting an accelerator program designed to expedite innovation within the existing regulatory framework.
Tokenization and Legislative Changes
Tokenization also stands out as a pivotal aspect of these initiatives. The government is set to release guidelines permitting the use of distributed ledger technology for maintaining registers of debenture holders, while also investigating the use of electronic signatures for documenting bond issuances and the digitization of bearer bonds.
Aligning with Global Standards
In conjunction with these digital reforms, Hong Kong aims to amend its Inland Revenue Ordinance to align with the OECD’s Crypto-Asset Reporting Framework and the revised Common Reporting Standard over the course of the next two years. A legislative proposal is anticipated in the first half of this year to bolster tax transparency and address issues related to cross-border tax evasion.
Conclusion
These initiatives mark a significant commitment by Hong Kong to position itself competitively among the world’s leading cryptocurrency financial hubs, reflecting a proactive stance on digital asset regulation and innovation.
