Hong Kong unveils regulation to boost use of digital assets

• The Hong Kong government issued the “Policy Statement 2.0” on Thursday for the Development of Digital Assets in the region.
• This policy statement builds upon the foundational measures outlined in the initial policy statement released in October 2022.
• The new policy aims to establish Hong Kong as a global hub for digital assets innovation, with a focus on risk management, investor protection, and real-world utility.

The Hong Kong government issued the “Policy Statement 2.0” on Thursday for the Development of Digital Assets in the country. Building on the groundwork laid by the 2022 framework, the new policy aims to establish Hong Kong as a global hub for digital assets innovation, with a focus on risk management, investor protection, and real-world utility.

Hong Kong aims to scale digital assets leadership  

Hong Kong’s government issued its “Policy Statement 2.0” on Thursday to boost the country’s innovation in the digital asset field. This new policy is built upon the foundation of the previous statement released in October 2022.

The latest statement introduces the “LEAP” framework, which focuses on streamlined legal regulations, expanding tokenized products such as Real-World Assets (RWAs), and fostering innovation and developing talent.

Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury said in a press release that “Hong Kong is uniquely positioned to bridge traditional finance with the DA era.”

Hui continued that the framework set out in Policy Statement 2.0 helps the region to “leap towards a trusted, sustainable and deeply integrated DA ecosystem embedded within the real economy". It also keeps Hong Kong at the forefront of digital transformation, offering a clear roadmap for businesses and investors to thrive in a secure and vibrant Digital Asset market, he said.

As per the latest report, the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) departments in the city will conduct public consultations on the licensing regimes for DA dealing service providers and DA custodian service providers shortly.

The favorable policy for the Hong Kong government signals a bullish outlook for the overall crypto market in the long term, as it would increase liquidity, wider adoption, clarity in regulations, and drive innovation.