Recently, the Chief Executive of the Hong Kong Special Administrative Region, John Lee, delivered his fourth policy address during his term. The report mentioned that the HKMA will continue to advance the Ensemble project, including promoting commercial banks to launch tokenized deposits and real tokenized asset transactions, such as using tokenized deposits to settle tokenized money market funds; and assisting the government in regularizing the issuance of tokenized bonds, and encouraging banks to strengthen risk management through regulatory sandboxes. In addition, he stated that he would enrich gold investment tools, assist issuers in issuing gold funds, and support the development of new products, such as tokenized gold investment products.
Vigorously develop tokenized assets
It is reported that the Ensemble project aims to support the development of Hong Kong's tokenization market. Through sandbox experiments, industry participants can explore how to use blockchain technology to build a new generation of financial infrastructure in actual business scenarios. Fung-yee Leung, Chief Executive of the Hong Kong Securities and Futures Commission (SFC), stated that Project Ensemble is a critical infrastructure project that will drive the scaling of the tokenized ecosystem in its next phase of development. It is also the core of Hong Kong's innovative financial infrastructure and will guide Hong Kong's financial system into the future. John Lee's 2024 Policy Address also addressed issues related to stablecoins and tokenization. It mentioned that the HKMA is piloting the tokenization of electronic bills of lading through the Project Ensemble sandbox, leveraging technology to reduce fraud risks and assist financial institutions in granting trade-related financing. The 2024 Policy Address proposed that the HKMA will, in conjunction with other jurisdictions, develop a mechanism for transmitting relevant trade information on a trial basis to promote cross-border data flows and the digitization of international trade. The HKMA will also use the Stablecoin Issuer Sandbox to allow potential issuers to test their business plans and application scenarios. The HKMA plans to submit a draft bill with the Treasury Bureau this year to regulate issuers of fiat-denominated stablecoins. In his article "Hong Kong's Wealth Management Market: Opportunities and Prospects," Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, noted that as of mid-July 2025, 22 banks had been approved to sell digital asset-related products, 13 banks had been approved to sell tokenized securities, and another five banks had been approved to provide digital asset custody services. In the first half of 2025, total bank transactions in digital asset-related products and tokenized assets reached HK$26.1 billion, up 233% year-on-year and exceeding last year's total for the entire year. With several asset management companies also announcing plans to launch tokenized products, and the government actively promoting the issuance of tokenized bonds, it is believed that Hong Kong's growth momentum in the digital asset sector will continue, providing new impetus for the development of Hong Kong's wealth management business. Implementation of the Stablecoin Issuer Regime The 2025 Policy Address also stated that Hong Kong is implementing a stablecoin issuer regime and formulating legislative proposals for a licensing system for digital asset trading and custody services. The Securities and Futures Commission (SFC) is exploring expanding the types of digital asset products and services available to professional investors while ensuring adequate investor protections. It will also strengthen international tax cooperation and combat cross-border tax evasion. The SFC will establish a risk defense against digital assets in Hong Kong by introducing automated reporting and data monitoring tools. "Hong Kong's stablecoin issuer regime is primarily intended to enhance payment convenience, particularly cross-border payments. The opportunities it presents to the banking industry include increased interest income, custody services for stablecoins, and revenue related to cross-border wealth management," said Michael Huang, a financial institution ratings analyst at Standard & Poor's. The Chairperson of the Hong Kong Association of Banks, Ms. Huen Wai-yee, stated that the Hong Kong banking industry has actively participated in various fintech and digital asset sandboxes and pilot programs initiated by regulators, promoting the responsible application of artificial intelligence, as well as the development of areas such as asset tokenization and digital currencies. The Association of Banks looks forward to the authorities establishing a licensing system for digital asset trading and custody services, improving the development of Hong Kong's digital asset ecosystem, and promoting Hong Kong as a global digital asset hub. Earlier, Mr. John Lee stated that since the current government took office, Hong Kong's economy has successfully reversed negative growth and achieved positive growth. Quoting a line from Peng Duanshu's "On Learning," Lee noted that one would rather be a difficult reformer than a comfortable stagnant person. In today's volatile geopolitical landscape and increasing uncertainty, Hong Kong can offer the world the certainty of security and development, which the world needs and desires. He said that national and global opportunities surround Hong Kong. As long as we seize these opportunities, continuously enhance our own value and competitiveness, pursue reform and progress, and innovate and create, "with the wisdom and experience of Hong Kong people, I am confident that the Pearl of the Orient will shine even brighter on the world stage."
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