Gov’t to Introduce Virtual Asset Policy to Support Financial Industry

The Financial Services and the Treasury Bureau have launched proposals to develop Hong Kong into a digital token centre. According to a policy statement released on Oct. 31, the government is looking to set a licensing regime for virtual assets, with the goal of building a sustainable environment for virtual assets to flourish in Hong Kong.

Retail investors may also be given “suitable degree” of access, as Hong Kong considers the possibility of Exchange Traded Funds (ETFs) on virtual assets.

Property rights for tokenised assets, and the legality surrounding smart contracts, are likely to undergo review to facilitate their development for usage in Hong Kong. Moving forward, the Monetary Authority will announce the framework for stable coins and cryptocurrencies.

“Our policy stance on VA is now clearly communicated to the global markets, and it serves to demonstrate our commitment and determination to explore financial innovations together with the global [virtual asset] community,” said Financial Secretary Paul Chan.

Secretary for Financial Services and the Treasury Christopher Hui also acknowledges the potential of Web 3.0 to become the future of finance, adding that regulation is needed to enhance efficiency.

The government is currently exploring pilot projects to test future applications of virtual assets in Hong Kong. Some of these projects include non-fungible tokens (NFT), green bond tokenisation, and e-HKD.