Hong Kong Treasury Bureau: Actively conducting research on the applicability of existing legislation to tokenized bonds in order to promote the adoption of tokenization technology in the Hong Kong bond market.

On November 21, the Financial Secretary of Hong Kong, Paul Chan Mo Po, delivered a speech at the Financial Technology Outlook Seminar and the presentation of the 01 Financial Technology Excellence Awards 2025, stating that the Treasury Department of Hong Kong and the Hong Kong Monetary Authority are jointly conducting research on the applicability of tokenized bonds under current legislation to promote the use of tokenization technology in the Hong Kong bond market. Details will be announced in the first half of next year. In addition, financial regulatory authorities regularly review and optimize the regulatory framework for digital assets. For example, the Securities and Futures Commission of Hong Kong recently issued two new circulars at the beginning of this month, allowing licensed virtual asset trading platforms to share global listings with their overseas affiliated platforms, enabling local investors to better utilize global market liquidity and expand the range of products and services that virtual asset trading platforms can offer for all types of digital assets to facilitate industry development. Paul Chan mentioned that in terms of tokenized products, following the issuance of tokenized green bonds in 2023 and 2024, the Hong Kong government recently issued the third batch of tokenized green bonds last week, with a record issuance size of HK$10 billion. This issuance is currently the largest tokenized bond issuance in the world, retaining the key innovative features of previous issuances, including issuance in digital native form, providing investors with the option to participate in transactions through traditional market infrastructure, and integrating green bond disclosure into digital asset platforms. At the same time, this issuance also introduced options for tokenized settlement in Renminbi and Hong Kong dollars, making it the first digital bond to use these two tokenized central bank currencies in settlement procedures globally. The Hong Kong Monetary Authority's Ensemble project officially entered the trial phase last week, under the name EnsembleTX, focusing on promoting the use of tokenized deposits in trading tokenized currency market funds by market participants to manage liquidity and fund requirements in real-time. The Ensemble project has moved from concept validation to conducting real transactions in a controlled trial environment, marking an important milestone in Hong Kong's push towards tokenization. EnsembleTX will continue to operate next year, laying a solid foundation for further innovation in the next phase. The trial environment will be gradually upgraded to optimize and drive the continuous development of a broader tokenization ecosystem in Hong Kong. The Securities and Futures Commission of Hong Kong will continue to work closely with the Hong Kong Monetary Authority to further implement tokenization technology in the financial industry. Furthermore, the Hong Kong government and the local financial regulatory authority of Shenzhen jointly released an action plan on November 19, leveraging Hong Kong's leading advantage in financial technology and Shenzhen's industrial financial expertise to strengthen cooperation in various aspects, including promoting the establishment of subsidiaries of Shenzhen financial institutions in Hong Kong, jointly building incubators, promoting continuous innovation in the application of DIGIHUMAN RMB, and jointly cultivating financial technology talents. Our goal is to establish more than 20 cross-border data validation platform applications in the financial sector between Shenzhen and Hong Kong by the end of 2027, fully utilizing the advantages of financial technology in both Shenzhen and Hong Kong to jointly create a global financial technology hub. Paul Chan stated that as an international financial center, Hong Kong follows the principle of "same business, same risk, same rules" in regulation, similar to the practices of other developed economies globally. Under this principle, in addition to trading platforms and stablecoins, Hong Kong is actively working to establish a licensing system for digital asset trading and custody service providers, with the aim of submitting a bill to the Legislative Council next year. After the legislative work is completed, Hong Kong's regulatory framework will comprehensively cover the key nodes of the digital asset industry, balancing risk management and investor protection, while providing favorable conditions for market development and financial innovation.