Hong Kong Unveils Policy Statement 2.0 to Boost Digital Asset Innovation and Ecosystem Development

Second policy statement on development of digital assets issued to scale Hong Kong to new heights of global digital asset leadership

The Government today (June 26) issued the Policy Statement 2.0 on the Development of Digital Assets in Hong Kong, reinforcing its commitment to establishing Hong Kong as a global hub for innovation in the digital asset (DA) field. This new policy statement builds upon the foundational measures outlined in the initial policy statement released in October 2022.

The Policy Statement 2.0 sets out a vision for a trusted and innovative DA ecosystem that prioritises risk management and investor protection, while delivering concrete benefits to the real economy and financial markets. The latest statement introduces the "LEAP" framework, which focuses on:

• Legal and regulatory streamlining: The Government is establishing a comprehensive and unified regulatory framework for DA service providers, covering DA exchanges, stablecoins issuers, DA dealing service providers and DA custodian service providers. In particular, the Securities and Futures Commission (SFC) will be the leading authority for the upcoming licensing regimes for DA dealing service providers and DA custodian service providers. Meanwhile, the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority will be spearheading a comprehensive legal review to facilitate the tokenisation of real-world assets (RWAs) and financial instruments. The review will adopt a holistic approach and consider different aspects of tokenised bond issuances and transactions, including but not limited to settlement, registration and record requirements.

• Expanding the suite of tokenised products: The Government will regularise the issuance of tokenised Government bonds and incentivise the tokenisation of RWAs to enhance liquidity and accessibility through, among other initiatives, clarifying the stamp duty treatment for tokenised exchange traded funds (ETFs). With that, the Government welcomes the introduction of secondary market trading of these tokenised ETFs on licensed DA trading platforms or through other channels. The Government will also promote the tokenisation of a broader range of assets and financial instruments, demonstrating the versatility of this technology across sectors such as precious metals (e.g. gold) and non-ferrous metals, and renewable energy (e.g. solar panels).

• Advancing use cases and cross-sectoral collaboration: The implementation of the licensing regime for stablecoin issuers on August 1 will facilitate the development of real-world use cases. The Government is also fostering collaboration among regulators, law enforcement agenciesand technology providers for development of DA infrastructures. To demonstrate support and to take the lead, the Government welcomes proposals from market participants on how the Government may test the usage of licensed stablecoins. Also, Cyberport will launch a funding scheme for blockchain andDA, offering funding to exemplary and high-impact applications with potentialto serve as benchmark for future use cases.

• People and partnership development: The Government is strengthening talent development through partnerships withindustry and academia, and is positioning Hong Kong as a centre of excellence for DA knowledge-sharing and international co-operation, including joint research initiatives and global regulatory collaboration. The Government will build a sustainable talent pool through cultivating a new generation of entrepreneurs, researchers and technologists.

The full policy statement can be seen at the Annex.

The Financial Secretary, Mr Paul Chan, said, "Digital assets hold great development potential with significance to fintech. Through the adoption of blockchain technology, more efficient financial transactions at a lower cost can be realised to bring in more inclusive financial services. The Policy Statement 2.0 sets out our vision for DA development and showcases the practical use of tokenisation through application, with a view to boosting the diversification of use cases. We strive to build a more flourishing DA ecosystem which will integrate the real economy with social life through a prudent regulatory regime and encouragement to market innovation, such that it will bring benefits to both the economy and society while consolidating Hong Kong's leading position as an international financial centre."

The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "Hong Kong is uniquely positioned to bridge traditional finance with the DA era. The framework set out in the Policy Statement 2.0 helps us "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 DA market."

The FSTB and the SFC will be conducting public consultations on the licensing regimes for DA dealing service providers and DA custodian service providers shortly.

Government announces updates on follow-up work on Tai Po fire

The three task forces set up by the Government for the fire at Wang Fuk Court in Tai Po - the Task Force on Investigation and Regulation, the Task Force on Emergency Support and Fund-Raising, and the Task Force on Emergency Accommodation Arrangements - are making full efforts to follow up on the support, relief, and investigation work related to the incident. Details are as follows:

Financial and welfare support

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For the Support Fund for Wang Fuk Court in Tai Po, established by the Government, donations received are about $3.4 billion as of noon today (December 13). With the start-up capital of $300 million from the Government, the fund's total has now reached around $3.7 billion. The fund will be used to assist residents in rebuilding their homes and providing long-term and sustained support.

Accommodation support

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As of this morning, a total of 1 392 residents have been accommodated, through the co-ordination of the Home and Youth Affairs Bureau, in youth hostels, camps, or hotel rooms. Another 3 163 residents are currently living in transitional housing units provided by the Housing Bureau or units from the Hong Kong Housing Society (HKHS).

In consideration of the extremely urgent situation of the residents affected by the fire incident, a special arrangement of a full rent exemption has been made earlier by the Housing Bureau to provide accommodation support to those affected residents moving into transitional housing or HKHS projects. In other words, if needed, the affected residents can stay for a longer period of time. The Government will continue to support the affected residents in terms of accommodation, and the residents in need do not have to worry about the relevant rental expenses or the duration of stay.

In addition, staff from the operating organisations of transitional housing and HKHS, as well as volunteers have been working around the clock to furnish the units with essential supplies. Taking Eminence Tower in Hung Shui Kiu as an example, each unit is equipped, upon move-in, with furniture and appliances such as bed frames, mattresses, pillows, cooking stoves and water heaters. Daily necessities including toilet paper, slippers and basic cleaning supplies, etc. are also provided. Such efforts are intended to help the affected residents settle in as quickly as possible.

At the same time, a number of organisations have proactively stationed their staff in some projects to provide residents in need with various forms of support, including free medical and legal consultation services. The Government has also set up service stations in 18 projects where more residents have moved in, providing consultation and support services for residents in need, standing together with them.

Relief supplies and donations

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The supplies donation online platform, established by the Government and the information technology sector, continues to operate, facilitating the registration of supplies donations from organisations and the public. The Government has so far received over 1 800 registrations, of which approximately 30 per cent were submitted by organisations, whereas the others were contributed by the public. The various registered donation items include food and beverages, clothing, daily necessities, bedding, and electrical appliances. The Government is actively assessing residents' actual needs through the relevant policy bureau, government departments, and service organisations for the matching of donated supplies in order to distribute appropriate items in phases to places in need. So far, about 19 600 donation items covering various categories have been distributed to different places. The matching and distribution of supplies will continue.

Regulation and inspection work

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The Housing Department today continued to remove the burnt scaffolding on the external walls of Wang Cheong House, Wang Tai House and Wang Sun House. As the environment at scene is narrow and the scaffolding and the protective nets of individual buildings may be subject to more serious damage, for the sake of safety, the Housing Department will conduct assessments with the Police on the timetable of removing the scaffolding of the remaining four affected buildings. In addition, the Independent Checking Unit of the Housing Bureau has also completed the extraction of concrete core samples from the seven affected buildings at Wang Fuk Court today.

The Development Bureau (DEVB) announced on December 11 a new mechanism for sampling and testing scaffold nets for external walls in Hong Kong. The Buildings Department is preparing for the issuance of a new practice note to registered contractors and will meet with the industry next week. The DEVB is moving ahead in full steam the supporting arrangements to ensure that there are sufficient designated laboratories and a suitable site for off-site sampling work.

Source: AI-found images