Hong Kong Stablecoin Draft Officially Takes Effect: Analysis of Hong Kong's Digital Asset Regulation

Introduction

"Hong Kong's digital asset regulatory framework and its pioneering sandbox use case practices clearly demonstrate how innovation can achieve steady development within a compliant framework. As stated in the Hong Kong Digital Asset Development Policy Statement 2.0, Hong Kong is continuously building a "trustworthy and innovation-focused digital asset ecosystem" and will continue to consolidate its leading position in the global digital asset field, promoting Hong Kong to become a global innovation center."

Hong Kong's Digital Asset Development History

1.1 Prelude: Mainland China's "Pause Button" and the World's "Fast Forward Button" (2017-2022)

In 2017, mainland China implemented a comprehensive policy halt to the virtual asset market, pressing the "pause button" on the development of digital assets. In September of that year, seven Chinese ministries jointly issued the "Announcement on Preventing Risks in Token Issuance and Financing," halting all initial coin offerings (ICOs) and shutting down all domestic virtual currency trading platforms in an effort to effectively eliminate market risks. Since then, mainland China has further strengthened its crackdown on disguised and over-the-counter transactions, and in September 2021, it explicitly designated all virtual currency-related businesses (including trading, redemption, intermediary services, and advertising) as illegal financial activities. This series of high-pressure regulatory measures has effectively maintained the stability of the financial system and the controllability of risks. However, this strict "blockade" inadvertently became a catalyst for the global crypto industry, triggering a wave of talent, capital, and projects going global. A large number of Web3 entrepreneurs, technical teams, and funds previously active in mainland China began seeking compliant development opportunities overseas, accelerating the global spread and expansion of the Web3 concept. While mainland China implements strict regulation, Hong Kong's role is more cautious and nuanced. It serves as both a "firewall" to prevent risk spillover and a quiet "observatory" for observing global Web3 development. To protect investor interests while encouraging fintech innovation, the Hong Kong Monetary Authority (HKMA) pioneered the "Fintech Regulatory Sandbox" in September 2016. Subsequently, the Securities and Futures Commission (SFC) and the Insurance Authority (HKIA) each launched their own sandboxes, which were upgraded to "Sandbox 2.0" in 2017 to achieve cross-sector coordination. In September of the same year, the Securities and Futures Commission (SFC) of Hong Kong issued its first statement on ICOs, stating that if tokens possess "security" attributes, they may be regulated under the Securities and Futures Ordinance, emphasizing the regulatory principle of "substance over form." Since then, the SFC has continued to monitor the operations of virtual asset fund managers and trading platforms, and in 2018, it launched the Fintech Regulatory Sandbox, allowing companies to test their fintech projects, including those related to virtual assets, in a controlled environment. At the application level, the Hong Kong government is actively exploring the practical applications of blockchain technology. For example, in 2020, it completed four blockchain pilot projects covering government services such as trademark transfers, environmental impact assessments, pharmaceutical product traceability, and company document archiving to explore the feasibility and benefits of blockchain technology. In June 2022, the government further launched the "Common Blockchain Platform" and plans to develop more common services and reference modules to assist various policy bureaux and departments in developing more blockchain applications. Furthermore, Hong Kong is actively exploring central bank digital currencies (CBDCs) and the tokenization of real-world assets (RWAs). The Hong Kong Monetary Authority (HKMA) launched the "Digital Hong Kong Dollar" research project in June 2021 and published the "Discussion Paper on Cryptoassets and Stablecoins" in January 2022, proposing a regulatory framework for stablecoins. In 2021, the HKMA and the Hong Kong Center of the Bank for International Settlements Innovation Hub completed "Project Genesis," a pilot project aimed at piloting the issuance of tokenized green bonds in Hong Kong. In 2022, the Hong Kong government even participated in the NFT issuance pilot program at Hong Kong Fintech Week, aiming to test the technological benefits of virtual assets. During this period, it's hard not to wonder why Hong Kong, which firmly stands with the Chinese people on the financial and economic fronts, has been quietly preparing and researching a regulatory framework for virtual assets while mainland China is tightening regulations. Despite a relatively slow start in terms of policy, Hong Kong's deep foundation as an international financial center, strong traditional financial sector foundation, and professional financial services capabilities have laid the foundation for more proactive future development. 1.2 Key to the Game: Hong Kong's Moves and Strategic Intentions (2023-2025) From late 2022 to 2023, Hong Kong's digital asset regulatory policy underwent a landmark turning point, which is seen as a key move for Hong Kong in the global digital economy strategic game. On October 31, 2022, the Hong Kong SAR government issued the "Policy Statement on the Development of Virtual Assets in Hong Kong," explicitly proposing for the first time that it would "actively promote" the development of the virtual asset ecosystem, marking a shift in regulatory thinking from a "risk-oriented" to an "opportunity-oriented" approach. Subsequently, on December 7, 2022, the "Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022" was passed by the Hong Kong Legislative Council, formally establishing a mandatory licensing regime for virtual asset service providers (VASPs). This regime, effective June 1, 2023, allows licensed virtual asset trading platforms (VATPs) to provide services to retail investors while adhering to strict investor protection measures. Subsequently, Hong Kong approved virtual asset spot ETFs, making it the largest virtual asset ETF market in the Asia-Pacific region. As of June 2025, the SFC had officially licensed 10 VATPs, with applications pending for another 11 institutions. Furthermore, the Hong Kong SAR government designated the Stablecoin Ordinance as coming into force on August 1, 2025, further strengthening the regulatory framework for digital assets. The decision to "open the door" at this time is interpreted by the author as a high-level strategic decision at the national level. After the global crypto market experienced a period of unbridled growth and risk exposure (such as the FTX and LUNA incidents), the market's demand for compliance, transparency, and trust has become more intense than ever. Now is undoubtedly the perfect time for Hong Kong to serve as a "bridgehead," representing China in a compliant and controlled manner, to gather global digital asset resources and compete for a voice in the next generation of fintech. Hong Kong's unique "one country, two systems" framework enables it to balance its mission as an international financial center with mainland China's financial security concerns. Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, noted that the ordinance establishes a "risk-based, pragmatic, and flexible regulatory environment," providing healthy, responsible, and sustainable conditions for the development of Hong Kong's stablecoin and broader digital asset ecosystem. Its goal is to significantly increase the attractiveness of global Web3 talent, capital, and projects through a comprehensive regulatory framework and ecosystem, thereby empowering the real economy and providing new impetus for economic development. This will transform Hong Kong from a traditional international financial center into a leading global digital asset innovation hub, and consolidate its strategic position as a bridgehead for RMB internationalization and a "super connector." Hong Kong Financial Secretary Paul Chan Mo-po emphasized that Hong Kong's approach to Web 3.0 is not simply one of regulation, but rather one of striking a balance, ensuring market integrity while not stifling innovation. Hong Kong's "first-mover advantage" policy has also been actively engaged and echoed by mainland cities, foreshadowing the potential of a "Hong Kong pilot, mainland collaboration" model. For example, Ant Digital has designated Hong Kong as its overseas headquarters and successfully passed regulatory sandbox testing. Its RWA (Real World Asset) tokenization practices have been validated, such as the collaboration between Longsun Group and Ant Digital to complete China's first RWA project based on new energy physical assets, and the collaboration between GCL Energy and Ant Digital to complete an RWA based on photovoltaic physical assets. These projects were announced through the Hong Kong Monetary Authority's Ensemble Project Sandbox. These cases demonstrate that Hong Kong's regulatory clarity and international openness are providing a crucial channel for mainland enterprises to participate in the global digital asset market while complying with regulations. A report released by Zeng Shengjun of the Greater Bay Area Financial Research Institute of the Shenzhen Branch of the Bank of China and Guan Zhenqiu of the Hong Kong Institute of Finance of the Bank of China suggests that the experience of Hong Kong's stablecoin pilot program can be used to strengthen research on offshore RMB-linked stablecoins. Furthermore, the Hong Kong SAR government itself has played a leading role, issuing NFTs in 2022, becoming the first government in China to issue tokenized government green bonds in 2023, and issuing the second batch of tokenized government green bonds in 2024. This strategic synergy not only promotes the development of Hong Kong's digital asset ecosystem but also builds a new bridge connecting the mainland with international capital markets. Long Image: Major Events in Hong Kong, 2015 to August 2025 Hong Kong's "Twin Peaks" Regulatory Framework for Digital Assets Hong Kong's digital asset regulatory system is characterized by its "Twin Peaks" model. The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) collaborate across two regulatory bodies, creating a regulatory environment that encourages financial innovation while maintaining a strict risk-based environment. The essence of this model lies in its clear division of responsibilities: the SFC focuses on the "investment" attributes of virtual assets, while the HKMA focuses on their "payment" functions. The following table systematically explains the functions, legal basis, jurisdiction, and regulatory tone of the two regulatory bodies, providing a clear guide to understanding Hong Kong's regulatory blueprint. The Hong Kong Securities and Futures Commission (SFC) and the Hong Kong Markets Administration (HKMA) have established a synergistic and complementary regulatory framework through a clear division of responsibilities and close collaboration (such as the signing of a memorandum of understanding). As the guardian of the securities market, the SFC extends well-established investor protection principles to the virtual asset investment sector; while the HKMA, as the core of the financial system, ensures that innovations in payment tokens do not undermine Hong Kong's monetary foundations. This dual-track model with clear responsibilities and powers provides a solid institutional foundation for Hong Kong's development into a leading global virtual asset center.

Analysis of the Core of VASP Licensing and Stablecoin Issuance Regulation

Hong Kong's virtual asset regulatory framework is comprised of two core pillars: the Virtual Asset Service Provider (VASP) licensing system and the regulation of stablecoin issuance. This section will delve into the key points and regulatory logic of these two frameworks.

3.1 VASP Licensing System: Setting Red Lines for Trading Platforms

The VASP licensing system, effective June 1, 2023, is the core of Hong Kong's regulation of virtual asset trading. This system requires all centralized virtual asset trading platforms (VATPs) operating in Hong Kong or serving Hong Kong investors to be licensed, regardless of whether they trade security tokens. This initiative aims to bring all relevant platforms under a unified and rigorous regulatory framework. 1. Investor Protection: Informed, Understand the Risks, and Affordable Investors To protect retail investors, regulators have established multiple thresholds. Before opening an account for a retail client, platforms must assess their knowledge of virtual assets and provide full risk disclosure. When recommending a trade, they must also ensure that the advice is appropriate for the client's individual circumstances. The underlying logic is clear: ensuring that investors are "informed, understand the risks, and can afford" before entering the market, thereby avoiding unnecessary losses due to information asymmetry. Furthermore, the SFC reserves the power to impose investment caps on high-risk virtual assets, providing an additional layer of protection for retail investors' funds. 2. Customer Asset Security and Financial Soundness Drawing on the lessons learned from the collapse of platforms like FTX due to misuse of customer funds, Hong Kong has established some of the world's most stringent standards for customer asset security.

• Hard Segregation of Assets: The core requirement is that the platform must place clients' virtual assets with an independent third-party custodian (usually a licensed Hong Kong trust company) and adhere to the industry best practice of 98% cold storage and 2% hot storage. This is intended to minimize the possibility of asset misappropriation by the platform. Clients' fiat currencies must also be held in a separate trust or designated account.

• High Financial Thresholds: Platforms must not only have paid-in capital of no less than HK$5 million and HK$3 million in liquid funds, but must also reserve sufficient liquid assets to cover at least 12 months of operating expenses. This ensures the platform has the ability to withstand market risks and maintain continuous operations, preventing its own financial problems from harming investors' interests. Furthermore, platforms must purchase insurance approved by the Securities and Futures Commission for client assets.

3. Anti-Money Laundering/Counter-Terrorist Financing (AML/CFT)

The anonymity and cross-border nature of virtual assets make them a hotbed for illicit activities. Therefore, VASP licenses require platforms to strictly implement AML/CFT measures, such as Know Your Customer (KYC) and Customer Due Diligence (CDD). This includes continuously monitoring transactions, reporting suspicious activity, and encouraging the use of blockchain analysis tools to enhance tracing capabilities. These regulations aim to enhance transaction transparency, combat financial crime, and safeguard Hong Kong's reputation as an international financial center and the integrity of its financial system.

4. Token Listing and Trading Scope

To mitigate risks at the source, platforms must establish an independent Token Review Committee. This committee is responsible for conducting rigorous due diligence on all tokens proposed for listing, assessing their legality, security, team background, and even technical foundation. Regulations clearly stipulate that only highly liquid tokens that are not securities and are included in mainstream indices are available to retail investors. This prudent screening mechanism is intended to protect investors (especially retail investors) from low-quality or fraudulent projects and ensure market fairness and transparency.

5. Prohibited Business Activities

To ensure the neutrality of the platform, VATP is prohibited from conducting proprietary trading for its own accounts. The core purpose is to prevent conflicts of interest between the platform and its clients. In addition, current guidelines still prohibit platforms from issuing or trading virtual asset futures and related derivatives. This reflects the regulator's cautious attitude when dealing with complex and high-risk products, prioritizing market stability. The CSRC stated that it will review the possibility of opening such products to institutional investors at an appropriate time in the future. 3.2 Stablecoin Regulatory Framework: Regulating "Quasi-Currencies" Stablecoin regulation is a key step in Hong Kong's development as a global virtual asset hub, led by the Hong Kong Monetary Authority (HKMA). The relevant draft bill was passed on May 21, 2025, and will officially take effect on August 1 of the same year. 1. Focus on Fiat-Pegged Stablecoins The core target of the regulatory framework is "specified stablecoins" pegged to one or more fiat currencies. This is because these assets have payment potential and their stability is directly related to financial security. Based on the lessons learned from the Terra/LUNA collapse, algorithmic stablecoins lacking physical asset backing are explicitly excluded from regulation. Notably, this regulation has extraterritorial effect: regardless of the issuer's location, any Hong Kong dollar stablecoin issued by it that reaches Hong Kong users must comply with Hong Kong's licensing requirements. 2. Ensure the Truth of "Stable" To issue a stablecoin in Hong Kong, the issuer must obtain a license from the HKMA. Core requirements revolve around "stability" and "trustworthiness": 1:1 Full Reserve: Reserves must be 100% backed by high-quality liquid assets. Transparency and Trustworthiness: Reserves must undergo regular third-party audits and be disclosed to the public. Robust Operations: A reliable redemption mechanism, strict AML/CFT measures, and plans to ensure cybersecurity and business continuity must be in place. These high threshold requirements are intended to ensure stablecoins are readily redeemable, prevent the risk of "depegging," and thus build market confidence. 3. A Cautious Start to Encourage Innovation The HKMA will adopt an extremely cautious approach in the initial licensing process, anticipating only a small number of licenses. Applicants will be required to demonstrate clear and real-world application scenarios for their stablecoins. Hong Kong has established a "sandbox" mechanism to allow interested institutions to test their business models and risk management capabilities in a controlled environment. This "prudent licensing + sandbox pilot" strategy aims to ensure that the first batch of licensed institutions serve as benchmarks while providing valuable practical experience for regulators and the market. Ultimately, this will promote the compliant use of stablecoins in areas such as payments and cross-border remittances, thereby consolidating Hong Kong's position as a leading financial innovator. In the following section, we will further analyze how this mechanism operates. A Panoramic View of the Regulatory Sandbox Process from the Applicant's Perspective Hong Kong's core strategy in virtual asset regulation is its meticulously designed "Regulatory Sandbox" mechanism. This is not only a regulatory tool but also a strategic platform for fostering the development of the fintech ecosystem, aiming to strike a balance between embracing fintech innovation and maintaining financial stability and investor protection. Hong Kong's "Regulatory Sandbox" is essentially a "dialogue mechanism between regulation and innovation" and a "testing ground for risk isolation." This process is more than a simple license application; it is a lengthy, rigorous, and deeply interactive journey of "co-evolution." It places extremely high demands on applicants' capital, technology, compliance capabilities, and risk management capabilities. To visualize this complex, multi-stage approval process, the author has constructed the following "Regulatory Sandbox Panoramic Flowchart." This chart, using a timeline as its axis, details each key step, interaction model, and deliverables from initial conception to final license acquisition, aiming to provide potential applicants with a clear roadmap. As can be seen from the above diagram, the entire process design reflects the rigor, interactivity, and thoroughness of Hong Kong's regulatory authorities. 1. Preparation is King (Application Phase): This phase focuses on internal "refining." The HKMA expects applicants to have completed a highly sophisticated business model design, technical system development, and compliance framework establishment before formal submission. This effectively brings most of the preparatory work upfront, ensuring that only well-prepared, high-quality participants enter the sandbox. 2. In-depth Interaction (Testing Phase): Far from a passive observation period, the sandbox serves as a "laboratory" where regulation and innovation collide and evolve together. By assigning "case officers," establishing a "chat room" mechanism, and requiring continuous data sharing and reporting, the HKMA is able to gain a deeper understanding of the actual operational risks of innovative businesses. Under regulatory guidance, businesses can then promptly adjust and optimize their plans to mitigate the risk of eventual non-compliance. 3. High-Standard Graduation (Assessment Phase): The "graduation" threshold is extremely high, with assessment criteria directly addressing the core of financial stability—reserve funds, redemption mechanisms, risk control systems, and technical security. The design, from "Approval in Principle (AIP)" to "full license," provides a final safeguard for eventual market access, ensuring that all promised capital and systems are fully in place. This rigorous process is more than just a regulatory checkpoint; it fosters a mutually beneficial ecosystem between regulators and innovative enterprises. Its practical impact is two-way, as demonstrated in the following two aspects: In summary, Hong Kong's regulatory sandbox mechanism, particularly the pathway designed for stablecoin issuers, is the most strategically visionary component of its digital asset regulatory framework. It transcends the traditional one-dimensional approval model and creatively integrates the seemingly opposing concepts of "strict regulation" and "cutting-edge innovation." Through this meticulously designed process, Hong Kong not only sets world-leading compliance standards for the market but also fosters a dynamic, self-optimizing ecosystem of interaction between regulators and the industry. This not only safeguards Hong Kong's own financial stability but also signals to the world that Hong Kong has the ability and wisdom to steer the future of digital finance and is committed to becoming the safest, most regulated, and most dynamic hub for the global virtual asset sector. This "two-way empowerment" sandbox is the cornerstone of Hong Kong's global leadership in digital finance. In the fifth part of this article, we will delve into the sandbox to analyze this dynamic interaction. This chapter analyzes practical examples of regulatory sandboxes in Hong Kong's digital asset sector, revealing key considerations from a regulatory perspective and attempting to grasp the "pulse" of Hong Kong's embrace of web3 innovation. 5.1 Stablecoin Regulatory Sandbox: Pragmatism First, Addressing Pain Points In July 2023, the Hong Kong Monetary Authority (HKMA) launched a consultation on legislative proposals for implementing a regulatory regime for stablecoin issuers and announced the launch of a sandbox. In July 2024, the HKMA announced the first batch of participants entering the sandbox, including JD CoinChain Technology (Hong Kong), Yuanbi Technology, and a consortium consisting of Standard Chartered Bank (Hong Kong), Anmi Group, and HKT. All three companies plan to initially issue stablecoins pegged to the Hong Kong dollar. JD CoinChain Technology (Hong Kong): According to Liu Peng, CEO of JD CoinChain, its stablecoin project (JD-HKD) focuses on three practical use cases: cross-border payments, investment transactions, and retail payments. JD.com will expand its cross-border payment user base through direct and indirect customer acquisition (such as partnerships with compliant wholesalers), and collaborate with global compliant exchanges to expand its investment and trading clientele. For retail payments, the stablecoin will be launched first on JD Global Shopping's Hong Kong and Macau sites, allowing users to pay bills in JD's e-commerce businesses in Hong Kong and Macau. JD.com will develop tailored stablecoin payment solutions for different industries. In conjunction with JD.com's international logistics, the company will upload data such as orders and warehouses for small and medium-sized enterprises (SMEs) going global to the blockchain, improving their payment and financing efficiency. JD.com's JD Coin Chain has reportedly registered the names "JCOIN" and "JOYCOIN," and the market generally believes these two names will be used for its stablecoins. Circle Coin Technology: Founded by Norman Chan, former Chief Executive of the Hong Kong Monetary Authority, Circle Coin Technology is about to launch the Hong Kong dollar stablecoin, HKDR, targeting three key business scenarios: cross-border trade, virtual asset trading, and RWA. Leveraging its parent company's existing Stored Value Facility (SVF) license, as well as the foundation and channels accumulated by shareholders and partners like HashKey Exchange, Cobo Digital Asset Custodian, and LianLian Pay in the web3, custody, payment, and trading sectors, Yuanbi Technology is poised to leverage its ecosystem synergy to build a comprehensive web3 payment ecosystem, seamlessly integrating web2 and web3. The Standard Chartered Bank, Anni Group, and HKT consortium: Anni Group, a pioneer in the native web3 space, is responsible for developing native web3 application scenarios. Standard Chartered Bank, as the Hong Kong dollar note-issuing bank, leverages its banking client base. HKT, with its electronic payment app Tap&Go, focuses on reaching retail customers. Through this joint application, the three parties aim to maximize the promotion, scaled circulation, and application of stablecoins, reaching a comprehensive audience of traditional banking and payment clients, as well as web3 users. Application scenarios include virtual asset trading in web3 games and cross-border trade and financial settlement in traditional finance. Notably, on July 23rd, Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), reiterated that many of the dozens of institutions he has approached with regarding stablecoin license applications lack practical application scenarios, concrete and feasible plans, and implementation plans, let alone risk management awareness and capabilities. Some institutions that can offer application scenarios lack the technology to issue stablecoins, the experience, and the ability to manage financial risks. He recommended that these institutions not become issuers themselves, but rather collaborate with issuers to provide application scenarios. Overall, the HKMA will only approve a few stablecoin licenses, which "may disappoint many applicants." Based on the stablecoin issuers currently approved, the HKMA considers the following three key factors: First, it focuses on whether the issuer has a real application scenario, particularly in cross-border trade, e-commerce, finance, and other real economy service sectors, and whether it can leverage the advantages of stablecoin technology to improve payment efficiency and other financial conveniences in transactions. Second, whether they have the awareness and ability to manage financial risks and ensure the establishment of appropriate investor protection measures. Third, control the overall number of licenses issued to avoid financial risks and waste of competitive resources caused by the lack of the first two necessary prerequisites.

5.2 Ensemble Sandbox: Innovating Financial Market Infrastructure and Promoting Tokenized Applications

In March 2024, the Hong Kong Monetary Authority announced the launch of the Ensemble project to promote the use of wholesale central bank digital currency (wCBDC) for interbank tokenized deposit settlement and the use of tokenized currency for tokenized asset trading. In May of the same year, the Ensemble Project Architecture Working Group was established to work with the industry to establish standards and put forward recommendations to promote interoperability between wCBDC, tokenized currency and tokenized assets. In August, the Hong Kong Monetary Authority announced the progress of the first phase of Project Ensemble and introduced four key tokenization use cases: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance. Fung-yee Leung, Chief Executive Officer of the Securities and Futures Commission (SFC), stated that Project Ensemble is a critical architectural project that will drive the scale and development of the tokenized ecosystem in the next phase and is the core of Hong Kong's innovative financial infrastructure. Tokenizing central bank currency and bank deposits at the wholesale level will inject significant momentum into the overall tokenization effort. Tokenizing currency and deposits is a prerequisite for fully realizing the potential of tokenization. Over the past year, Project Ensemble has announced numerous use cases, and this chapter will highlight some of them.

1. Green and Sustainable Finance

Ant Digit is a key participant in two key areas: green and sustainable finance, and trade and supply chain finance, and has implemented multiple use cases. In addition to the three use cases with Ant Digit, China Resources Longland's "Charge Beautiful" electric vehicle charging station tokenization case was also selected for the Hong Kong Ensemble project, with a business model similar to that of Longsin Technology. This section will focus on the three use cases with Ant Digit.

• Charging Pile Industry RWA (in collaboration with Longsin Technology): Longsin Technology is a leading energy technology company in China, having developed a variety of digital energy products and a new energy internet platform. For example, its utility payment platform, partnering with Alipay and other payment gateways, provides over 450 million metered users with online services including "inquiry, payment, billing, and receipts" for utility services like water, electricity, and heating. Xinyao's photovoltaic cloud platform, through distributed photovoltaic platform operations, connects a wide range of power plants and aggregates surplus green electricity transactions. Its new energy charging platform, Xindiantu, has built an AI-powered charging hub, connecting new energy vehicle demand with over 2 million charging devices. This demonstrates that Longxin is not a traditional new energy company leveraging digital technology for transformation, but rather an industrial digital technology solutions provider with digital technology as its core competitiveness, specifically a "technology and service provider specializing in business information systems in the utility sector." This first RWA deal in the charging pile industry raised 100 million RMB. Longxin Group will use some of the charging piles operated on the Xindiantu platform as supporting assets, issuing "charging pile" digital assets on the blockchain based on trusted data. Each digital asset represents a share of the corresponding charging pile's revenue rights. Ant Chain's inside product module provides technical support for data on-chain. Local, small- and medium-sized charging stations connected to Xindiantu face similar financing challenges as small and medium-sized enterprises, such as low creditworthiness and difficulty obtaining bank financing. However, they also have the advantages of familiarity with local resources, market development, and flexible operating models. By uploading equipment operation data to the blockchain, the project is expected to provide construction and operational support to thousands of small and medium-sized energy storage and charging station operators on the platform, helping energy companies such as energy storage and charging operators to leverage their existing high-quality assets. Photovoltaic Industry RWA (in collaboration with GCL Energy): Ant Digital further partnered with GCL Energy to successfully complete a RWA based on physical photovoltaic assets, involving over 200 million RMB. GCL Energy's "Xin Yangguang" brand, based on its residential photovoltaic business, develops a complete, integrated business system encompassing product development, marketing, engineering construction, and operational maintenance for residential photovoltaic systems. GCL Energy uses approximately 82MW of "Xin Yangguang" residential photovoltaic power plants in Hubei and Hunan provinces as supporting assets for its RWA (Rechargeable Waiver) program. By integrating blockchain and IoT technologies, the project's value, operations, and revenue data are packaged and stored on the blockchain, generating digital tokens. Two-wheeled battery swap RWA (in partnership with the Xunying Group): Approximately 4,000 electric vehicle battery swap cabinets and 16,000 lithium batteries operated nationwide by Anhui Xunying New Energy Group are designated assets. This RWA program was issued to the private equity market, raising RMB 20 million. Combining IoT and blockchain technologies, the project's value, operations, and revenue data are stored on the blockchain, generating digital tokens. This approach aims to revitalize existing assets, accelerate capital recovery, and enhance the liquidity and tradability of battery swap assets. The three new energy RWA cases from Ant Digital's collaboration reveal several commonalities: First, compared to operational assets like agricultural products, real estate, and restaurant operations that require human intervention, new energy charging and swapping assets have the inherent advantage of being connected to power and the internet, enabling them to operate and upload data autonomously without human intervention. This eliminates the perception, as some commentators have, that "hiring a cleaning lady for 100,000 yuan a month to clean equipment" as an operating expense harms investors. Second, compared to direct financing, where the underlying assets are financed by large companies, and indirect financing, where the underlying assets are credited, RWA financing, through project financing (in the aforementioned cases, all involve the income rights of large-scale (millions) of small and medium-sized new energy operating terminal devices), offers a new solution for financing small and medium-sized enterprises (or rather, a collection of small and medium-sized enterprises or operators), supporting overseas capital in supporting the development of the domestic new energy industry. Third, Ant Digital provides multiple technologies to protect investor rights. For example, IoT technology ensures real-time asset connectivity and instant tracking of device operations, AI improves operational efficiency, and asset data is uploaded to the blockchain to ensure data authenticity and reliability. Ultimately, detailed data such as the new energy operator's charging device ID, status, charge level, amount, and time are synchronized with multiple parties, providing transparent visibility into assets and revenue. The above case study also provides new insights and inspiration for potential underlying assets for future RWA products. Existing assets with the four key characteristics of networked management, local operations, access to power and internet, and direct revenue generation hold significant potential as future RWA-backed assets. Examples include locally shared rental equipment (such as self-service strollers and scooters rented in shopping malls), smart unmanned retail kiosks, income rights from industrial rental equipment, smart parking revenue rights, and income rights from leasing edge computing node computing services. 2. Trade and Supply Chain Financing Cross-border trade involves numerous international trade documents. A single transoceanic shipment may require 50 pages of documents and 30 parties involved. As a crucial document of title, the ocean bill of lading ensures that the goods are delivered to the consignee listed on the final bill of lading. However, ocean bills of lading are still primarily circulated in traditional paper form, and the proportion of electronic bills of lading used was less than 4% in 2024. In 2018, COSCO SHIPPING initiated the establishment of the Global Shipping Business Network (GBSN). GBSN was registered in Hong Kong in 2021, and in July of the same year, it launched its first "paperless release" product. In June 2022, the first blockchain-based electronic bill of lading based on the GSBN platform, the IQAX eBL, was approved by the International P&I Group. Electronic Bill of Lading (eBL): Ant Digital assisted the HKMA in building a tokenized asset platform within the sandbox to facilitate delivery versus payment (DvP) transactions between traditional assets and tokenized deposits. This platform allows electronic bills of lading (eBL) issued by the Global Shipping Business Network (GSBN) to be tokenized and traded on the platform. Ant Digital has also facilitated the use of tokenized deposits to settle the transfer of eBLs with HSBC, Hang Seng Bank, and Bank of China (Hong Kong). This solution significantly improves the efficiency of trade processes, enhances data and transaction security, and opens up new avenues for addressing trade financing gaps. 3. Fixed Income and Investment Funds Fixed Income and Investment Funds focuses on the tokenization of bonds and funds. In the bond market, Hong Kong has explored the tokenization of green bonds through EvergreenHub: In February 2023, the Hong Kong SAR government announced the successful issuance of HK$800 million in tokenized green bonds under the Green Bond Programme, marking the world's first government-issued tokenized green bonds. The primary issuance of this bond was conducted on a private blockchain network, using a T+1 delivery versus payment (DvP) settlement method between security tokens representing the actual bond equity and cash tokens representing the HKMA's Hong Kong dollar legal tender bonds. Settlement was provided by the HKMA's Central Moneymarkets Unit (CMU), with settlement handled by Goldman Sachs' tokenization platform, GS DAPTM. Subsequent bond transactions (including coupon payments, secondary market settlement, and redemption at maturity) will also be conducted digitally on the private blockchain. In February 2024, the Hong Kong SAR government announced the successful issuance of digital green bonds denominated in Hong Kong dollars, RMB, US dollars, and euros under the Hong Kong Government Green Bond Program, with a total value of approximately HK$6 billion. These digital green bonds used the CMU and HSBC Orion digital asset platforms for settlement and delivery, and were among the world's first multi-currency digital bonds. The settlement process for traditional bond issuance or fund trading typically takes 2-5 business days, while tokenized bonds and funds support timely payment and settlement 24/7, significantly shortening the time required. This streamlines the transaction process, eliminates settlement delays, and reduces associated risks. At the launch ceremony of the Ensemble Sandbox in August 2024, Hong Kong Monetary Authority Deputy Chief Executive Howard Lee stated that the bond issuance being tested in the sandbox aims to verify the end-to-end transaction process and is technically different from previous tokenized bonds. The development of tokenized finance is not a one-time event and requires verification at different technical levels. It can be inferred that the initial issuance testing will focus on the issuance and settlement stages on blockchain networks and digital asset platforms. Later phases will test the circulation of bonds among a wider range of different entities, thereby verifying the technologies that enable 24/7 trading of tokenized green bonds. Regarding money market funds, HSBC and Bank of China (Hong Kong) are among the first participants in this initiative. According to the two banks, they have already demonstrated the feasibility of tokenizing deposits and financial assets, trading between tokenized deposits and tokenized assets, and transferring deposit tokens across blockchains of different financial institutions. This use case exemplifies how Ensemble facilitates the tokenization and trading of traditional financial assets between banks and its goal of building new financial market infrastructure. The diagram below illustrates the specific process, with bold arrows indicating new technologies and trading channels being tested in the sandbox. Figure: Ensemble Sandbox supports the tokenization of financial assets and the development of new infrastructure. 4. Liquidity Management Liquidity management focuses on repurchase agreements and treasury management use cases, enabling banks to build corporate treasury solutions for their clients based on tokenized deposits. In May 2025, HSBC launched its tokenized deposit infrastructure, launching Hong Kong's first bank-provided blockchain settlement service. Ant International was the first corporate client to adopt this solution. After tokenizing its subsidiary's deposits in HSBC accounts, Ant International issued a tokenized deposit transfer instruction to HSBC through its internal treasury platform, Whale, successfully completing an instant internal funds transfer. By leveraging the programmable and instant settlement features of tokenized deposits, tokenized treasury management solutions are expected to provide more transparent, efficient, and convenient corporate payment and treasury management solutions. Hong Kong's established digital asset regulatory framework and its pioneering sandbox use cases clearly demonstrate how innovation can achieve robust development within a compliant framework. As stated in the "Hong Kong Digital Asset Development Policy Statement 2.0," Hong Kong is continuously building a "trustworthy and innovation-focused digital asset ecosystem" and will continue to consolidate its leading position in the global digital asset sector, promoting Hong Kong's position as a global innovation hub.

  With the official implementation of the Stablecoin Ordinance on August 1, it also provides a more solid institutional foundation and broad development space for Hong Kong to promote the application scenarios of stablecoins, expand the types of tokenized products, and enhance the liquidity and popularity of stablecoins and tokenized financial products.

  Looking to the future, relying on the deep foundation of a traditional international financial center, the first-mover advantage of the systematic regulatory framework in the field of digital assets, and its natural hub position connecting the mainland with the global digital asset market, Hong Kong is expected to leap into a key node for global digital assets and a core hub for the tokenization of real-world assets, building a unique and irreplaceable competitive advantage.

  The article is from the Web3 Compliance Research Group, author: Lynne, Zhao Qirui