Hong Kong Releases Digital Asset Development Policy Declaration 2.0, Comprehensive Layout of Web3 Ecosystem

Recently, the Government of the Hong Kong Special Administrative Region released the "Hong Kong Digital Asset Development Policy Declaration 2.0", clearly stating its commitment to making Hong Kong a global leading digital asset center. This declaration aims to create a reliable market environment that is risk-controlled, innovative, and brings substantial benefits to the real economy and financial markets.

The release of this declaration coincides with Singapore tightening its policies against unlicensed institutions. Industry insiders generally believe that Singapore's influence on the Web3 sector may gradually weaken over the next few years. In contrast, Hong Kong's development prospects are more optimistic, with the potential to reclaim its position as the global center for Web3.

To achieve this vision, Hong Kong has proposed the "LEAP" strategic framework, which includes optimizing laws and regulations, expanding the variety of tokenized products, promoting application scenarios and cross-sector cooperation, as well as talent and partner development. This framework aims to create a trustworthy, innovative, and vibrant digital asset ecosystem, further consolidating Hong Kong's leading position in the global financial landscape.

In terms of regulation, Hong Kong plans to conduct public consultations on the licensing mechanism for digital asset trading service providers and custodians. The Securities and Futures Commission will be the main regulatory body responsible for licensing, registration, and setting standards, while the Hong Kong Monetary Authority will oversee related activities of banks.

In terms of product innovation, Hong Kong will promote the application of tokenization in the bond market and will regularize the issuance of tokenized government bonds. At the same time, the government will explore the possibility of tokenizing exchange-traded funds (ETFs) and consider related tax arrangements.

To support the development of stablecoins and other tokenized projects, Hong Kong will provide a favorable market environment and necessary regulatory guidelines. The government also welcomes market participants to propose suggestions on how to experiment with and use licensed stablecoins to enhance government payment efficiency.

In terms of talent development and industry support, Cyberport will launch a pilot funding program for blockchain and digital assets, providing funding and support for promising projects. The Invest Hong Kong will also provide comprehensive support for digital asset service providers to establish and expand their businesses in Hong Kong.

The Financial Secretary of Hong Kong, Paul Chan, stated that digital assets are an important component of financial technology and have tremendous development potential. Through blockchain technology, more efficient and low-cost financial transactions can be achieved, making financial services more inclusive. He emphasized that Hong Kong will build a thriving digital asset ecosystem that integrates with the real economy and social life by combining robust regulation with encouragement of market innovation.

The Secretary for Financial Services and the Treasury, Xu Zhengyu, pointed out that Hong Kong's unique advantages give it a head start in promoting the transition of traditional finance to the digital asset era. The new policy framework will help Hong Kong establish a foothold at the forefront of digital transformation, providing a clear development roadmap for businesses and investors.

Industry experts believe that this declaration showcases Hong Kong's ambition and determination in the digital asset sector. By optimizing legal regulations, expanding product varieties, promoting application scenario cooperation, and cultivating talent, Hong Kong is comprehensively building an ecological chain for the development of digital assets, striving to become a strategic hub that connects opportunities in China's digital economy with global financial innovation demands.

This series of policies not only reflects Hong Kong's support for Web3, but also represents an important step in integrating Web3 into financial infrastructure. By establishing a "trinity" system loop of regulatory certainty, asset penetrability, and tax competitiveness, Hong Kong is expected to become a benchmark for compliant innovation in digital assets in Asia within the next 3-5 years, providing a "Hong Kong solution" for the integration of global traditional finance and the digital economy.