Hong Kong Unveils Strategy to Regulate Cryptocurrency and Promote Tokenization
The government of Hong Kong has unveiled its second significant policy statement regarding digital assets, reaffirming its commitment to establishing the region as a global center for the industry. The announcement highlights plans to implement a regulatory framework that prioritizes risk management and investor protection.
This framework will be managed by the Securities and Futures Commission and will pertain to custodians, digital asset service providers, exchanges, and stablecoins, the government stated on Thursday. Public consultations regarding the licensing regimes are set to commence soon.
In recent years, Hong Kong has been taking steps to bolster its stance in the industry, with this announcement building on a previous statement from 2022 when it expressed its readiness to collaborate with industry participants. In December, four crypto exchanges were granted licenses, and last month, legislation was passed to enable the licensing of stablecoin issuers starting August 1.
The Financial Services and the Treasury Bureau (FSTB) along with the Hong Kong Monetary Authority will assess the legal framework concerning the tokenization of real-world assets (RWAs) and financial instruments, according to the government. This review will focus on transactions and issuances of tokenized bonds. Financial Secretary Paul Chan noted that the government is particularly interested in the practical applications of tokenization and expanding its use cases.
Globally, RWA tokenization has surged by 380% in merely three years, amassing a total of $24 billion as reported in a mid-2025 study by RedStone, Gauntlet, and RWA.xyz.
The government added, “We will institutionalize the issuance of tokenized Government bonds and promote the tokenization of RWAs to improve liquidity and accessibility, including clarifying stamp duty treatment for tokenized exchange-traded funds (ETFs).” It also supports the trading of these tokenized ETFs in secondary markets on licensed trading platforms.
Countries worldwide, including the U.K., U.S., South Korea, and Pakistan, are establishing their own frameworks for cryptocurrency businesses as interest in the sector continues to rise. The European Union’s regulatory framework for the industry, known as the Markets in Crypto Assets (MiCA) legislation, was published in 2023 and took effect last year.
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