Financial Secretary Highlights Hong Kong's Role in Advancing Web3 and Digital Assets at Consensus 2026

Speech by FS at Consensus Hong Kong 2026

Following is the speech by the Financial Secretary, Mr Paul Chan, at Consensus Hong Kong 2026 today (February 11):

Michael (Chairman of Consensus, Mr Michael Lau), Tom (Chief Executive Officer of Bullish Group, Mr Tom Farley), Jay (President of CoinDesk, Mr Jay Yarow), industry leaders and innovators, friends from around the world,

It is a pleasure to join you all at the Consensus Conference in Hong Kong for the second consecutive year. Let me begin by thanking CoinDesk for once again choosing Hong Kong to host this iconic event. This conference has become a powerful platform in Asia for exploring the cutting-edge trends in the Web3 space and for fostering partnerships and collaboration.

Evolving global trends

Globally, the application of Web3 technologies in finance continues to broaden in both scope and sophistication. A few trends are more prominent. The first is tokenisation of RWAs (real-world assets). In a growing number of markets, tokenisation initiatives are moving from "proof of concept" to real-word deployment, supported by more institutional adoption. Government bonds, money market funds and other more traditional financial instruments are increasingly being issued or mirrored on-chain, using digital ledgers to enhance settlement efficiency, enable fractional ownership and unlock liquidity in assets that have traditionally been less liquid.

Hong Kong is one of the pioneers in this space. The HKSAR Government was the first in the world to issue tokenised government green bonds. Last year, we build on this foundation by issuing the world's largest digital green bond, with a multi-currency offering of HK$10 billion. Meanwhile, financial institutions are becoming more receptive to digital assets. By the end of last year, banks in Hong Kong held over HK$14 billion in digital assets under custody, a year-on-year increase of about 180 per cent. Banks have also begun offering tokenised deposit services, with the total value of such deposits reaching HK$29 billion by the end of last year.

The second trend is a related and evolving one: that is, the interaction between "TradFi" (traditional finance) and "DeFi" (decentralised finance). Traditional institutions are now importing DeFi mechanisms into their own architectures – such as automated market-making, programmable liquidity pools and the use of on-chain collateral – to support more efficient trading, funding and settlement.At the same time, DeFi is coming under growing regulatory and supervisory pressure in multiple jurisdictions, particularly in relation to anti-money laundering, investor protection, and broader financial stability. There have been growing calls for DeFi to be brought under existing or emerging digital-asset regulatory frameworks.

The third trend is the growing intersection between AI and digital assets. AI systems are being designed to interact with tokenised money and smart contracts, enabling the autonomous execution of certain transactions and settlements. At the same time, AI tools are making digital asset markets more intelligent, efficient and data-driven. As AI agents become capable of making and executing decisions independently, we may begin to see the early forms of what some call the "machine economy": where AI agents can hold and transfer digital assets, pay for services, and transact with one another on chain. While this shift could deliver substantial efficiency gains, it also raises important questions around AI governance, accountability, and cybersecurity.

Hong Kong's approach

Against this backdrop of rapid global experimentation, what are we doing in Hong Kong? We are charting our course, leveraging our unique strengths as an international financial centre to stay at the forefront of innovation and keep pace with emerging developments. A few principles are guiding our strategy.

First, under the "one country, two systems" framework, Hong Kong is free to explore financial innovation, including in digital assets. We stand out as a market with consistent, predictable, forward-looking policies, and a balanced and trusted regulatory framework.We welcome Web3 innovators and institutions from around the world to develop and scale their businesses here.

At the same time, we recognisethat innovation often moves faster than regulation, potentially creating gaps and new risks. We are therefore carefully balancing the promotion of innovation with the need for sound risk management. Our objective is to embrace new technologies while safeguarding investors, consumers and the overall financial stability. The principle of "same activity, same risk, same regulation" continues to underpin the design of our regulatory framework.

Second, we see Web3, blockchain technology and AI as powerful enablers of the real economy, rather than ends in themselves.Our policy focus is therefore on how these technologies can be applied to enhance efficiency, lower costs and support concrete, real-world use cases. Ultimately, our aim is to make financial services more inclusive and accessible, while addressing long-standing pain points in transactions and market operations.

Third, we are committed to pro-innovation regulation. Our regulators operate with a dual mandate: they not only exercise prudent supervision, but also actively facilitate market and product development.Through mechanisms such as regulatory sandboxes, we support experimentation and, in some cases, co-create solutions in close collaboration with innovators and industry participants.

Some latest initiatives

Ladies and gentlemen, with these guiding principles in mind, we are pressing ahead to advance Web3 development in Hong Kong. Let me highlight some of our latest initiatives.

First, on regulation. We continue to enhance Hong Kong's regulatory framework for digital assets, including the launch of a regulatory regime for stablecoin issuers in August last year. We see stablecoins as a practical tool for addressing the pain points in the real economy, particularly in payments and settlements. In giving out licences, we ensure that licensees have real-world use cases, a credible and sustainable business model, as well as strong regulatory compliance capabilities. Our strategy is moving forward fast, step by step. Therefore, we plan to issue only a small number of stablecoin issuer licences in the first batch in March this year.

Meanwhile, we are also finalising the details of a new licensing regime for digital asset dealers and custodian service providers, with the aim of introducing the relevant legislation this summer. Together with the frameworks already in place, this will ensure that our overall regulatory regime comprehensively covers the key nodes of the digital asset ecosystem.

Second, on product innovation and development. We will regularise the issuance of tokenised green bonds. At the same time, we encourage market innovation and nurture the broader ecosystem. For example, building on the Project Ensemble sandbox, Ensemble TX was launched by the HKMA (Hong Kong Monetary Authority) in November last year. It is a new pilot phase that enables faster, more transparent and more efficient settlement of real-value tokenised transactions.

Looking ahead, as the convergence of AI and blockchain continues to accelerate, the Government and our regulators will work with the industry to foster concrete, high-impact use cases, while ensuring that emerging risks are properly identified, monitored and managed.

Concluding Remarks

Ladies and gentlemen, before I close, let me leave you with this message: the Hong Kong SAR Government and our financial regulators fully recognise the need of and are committed to keeping pace with rapid technological change, and building a vibrant digital asset ecosystem here in Hong Kong. We welcome global innovators like you to join us on this journey.

In less than a week, we will celebrate the Chinese New Year. The Year of the Horse symbolises agility, stamina and strength. May I wish you all a prosperous and energetic year ahead. And for those who have travelled from afar, I hope you will take some time to enjoy the festive spirit and unique charm of Hong Kong.

My thanks once again to CoinDesk for hosting this remarkable event in Hong Kong. May this event inspire many more fresh ideas and lasting partnerships. Thank you very much.

Photo shows Mr Chan (left) visiting an exhibition booth. Source: HKSAR Government Press Releases

Photo shows Mr Chan (second right) visiting an exhibition booth. Source: HKSAR Government Press Releases

The Financial Secretary, Mr Paul Chan, Source: HKSAR Government Press Releases

The Financial Secretary, Mr Paul Chan, Source: HKSAR Government Press Releases

S for S intends to make recommendation to CE-in-C on striking-off order against three companies relating to Apple Daily

Following the Court of First Instance of the High Court's conviction and sentence of Apple Daily Limited, Apple Daily Printing Limited and AD Internet Limited (three companies relating to Apple Daily) for offences endangering national security, the Secretary for Security yesterday (February 11), pursuant to Article 31 of the Hong Kong National Security Law (HKNSL) and section 360C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), issued written notices to the three companies respectively, affording them an opportunity to make representations, before the Secretary for Security recommends the Chief Executive-in-Council (CE-in-C) to order the Registrar of Companies to strike the three companies off the Companies Register.

A spokesperson for the Security Bureau said, "Lai Chee-ying and the three companies relating to Apple Daily were prosecuted with a total of three charges of offences endangering national security, including 'conspiracy to commit collusion with a foreign country or with external elements to endanger national security' (contrary to Article 29 of the HKNSL and sections 159A and 159C of the Crimes Ordinance), and 'conspiracy to print, publish, sell, offer for sale, distribute, display and/or reproduce seditious publications' (contrary to sections 10, 159A and 159C of the Crimes Ordinance). The Court convicted Lai Chee-ying and the three defendant companies of all charges on December 15, 2025 and handed down sentences on February 9 this year. Amongst others, the three companies relating to Apple Daily were each sentenced to a fine of HK$3,004,500.

"The Court pointed out in its Reasons for Verdict that Lai Chee-ying closely managed and exercised hands-on control on the editorial direction of Apple Daily. Whether pre- or post- HKNSL, Lai Chee-ying utilised Apple Daily's platform to publish seditious articles, and requested foreign countries to impose sanctions or blockades or engage in other hostile activities against the People's Republic of China and the Hong Kong Special Administrative Region (HKSAR). The senior management of Apple Daily were fully aware of Lai Chee-ying's intention and provided support by executing his editorial directions. The conspiracies in the charges were facilitated by the three companies relating to Apple Daily, and they were knowing and willing parties to the conspiracies. The Court also held in its Reasons for Sentence that the offence of 'conspiracy to print, publish, sell, offer for sale, distribute, display and/or reproduce seditious publications' in this case fell within the most serious category for its type, and the two offences of 'conspiracy to commit collusion with a foreign country or with external elements to endanger national security' fell within the category of offences of 'a grave nature'."

"Article 31 of the HKNSL stipulates that the operation of an incorporated or unincorporated body such as a company or an organization shall be suspended or its licence or business permit shall be revoked if the body has been punished for committing an offence under that law. The HKSAR Government has a responsibility to enforce the relevant provisions in Article 31 of the HKNSL regarding the three companies relating to Apple Daily."

"Taking into account the relevant circumstances of the case, including the conviction and seriousness of the offences committed by the three companies relating to Apple Daily, the Secretary for Security now considers that it is necessary for safeguarding national security to prohibit the operation or continued operation of these three companies in Hong Kong, and therefore intends to make a recommendation to the CE-in-C to consider exercising the power under section 360C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) to order the Registrar of Companies to strike the three companies relating to Apple Daily off the Companies Register."

"The Secretary for Security has issued written notices to the three relevant companies respectively, affording them an opportunity to make written representations by February 25. When the Secretary for Security makes the relevant recommendation to the CE-in-C, the written representations submitted by the three relevant companies (if any) will be submitted together to the CE-in-C for a decision whether or not to make the order."

"If the CE-in-C eventually decides to order the Registrar of Companies to strike the three companies relating to Apple Daily off the Companies Register, the three companies will become 'prohibited organizations'. Any person who engages in the acts specified in sections 62 to 65 of the Safeguarding National Security Ordinance (SNSO) commits an offence, including acting as an office-bearer or a member of a prohibited organization and giving aids of any kind to a prohibited organization, and is liable on conviction to a maximum fine of $1,000,000 and imprisonment for 14 years."

The spokesperson pointed out, "The HKSAR Government steadfastly safeguards the rights and freedoms enjoyed by Hong Kong people as protected under the law. Since Hong Kong's return to the motherland, human rights in the city have always been robustly guaranteed constitutionally by both the Constitution and the Basic Law. The HKNSL and the SNSO also clearly stipulate that human rights shall be respected and protected in safeguarding national security in the HKSAR, and that the rights and freedoms, including the freedoms of speech, of the press, of publication, of association, of assembly, of procession and of demonstration, that Hong Kong residents enjoy under the Basic Law and the provisions of the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights as applied to Hong Kong, shall be protected in accordance with the law. Nonetheless, just as the case with other places in the world, such rights and freedoms are not absolute. The ICCPR also expressly states that some of them may be subject to restrictions as prescribed by law that are necessary for the protection of national security, public safety, public order or the rights and freedoms of others, etc."

The spokesperson stressed, "Safeguarding national security is a matter of fundamental importance. Endangering national security is a very serious offence. Such acts or activities may lead to extremely grave consequences. The Government of the HKSAR will, as always, resolutely, fully, and faithfully implement the HKNSL, the SNSO, and other relevant laws of the HKSAR for safeguarding national security to effectively prevent, suppress, and impose punishment for acts and activities endangering national security in accordance with the law, and prohibit the operation of organizations that engage in activities endangering national security in the HKSAR."

Source: AI-found images