Hong Kong has officially raised the stakes in the global race for digital asset leadership. On June 26, 2025, the Hong Kong Special Administrative Region government released the Hong Kong Digital Asset Development Policy Statement 2.0—a comprehensive roadmap positioning the city as a trusted, innovative, and globally connected center for digital finance.
This strategic upgrade, built on the foundation of its 2022 predecessor, introduces the “LEAP” framework, targeting four core pillars: Legal & Regulatory Enhancement, Expansion of Tokenized Products, Application Scenarios & Cross-border Collaboration, and Talent & Ecosystem Development. The goal? To create a sustainable, compliant, and economically integrated digital asset ecosystem that bridges Web3 innovation with real-world finance.
The LEAP Framework: A Strategic Blueprint
At the heart of Declaration 2.0 is a shift from experimentation to institutionalization. As Dr. Xiao Feng, Chairman and CEO of HashKey Group, notes, this isn’t just an update—it’s a structural transformation.
The LEAP framework emphasizes:
- Legal & Regulatory Clarity: Introducing enforceable rules for stablecoins and tokenized securities.
- Product Diversification: Expanding beyond cryptocurrencies to include tokenized ETFs, bonds, and real-world assets (RWA).
- Use Case Expansion: Encouraging integration across payments, trade finance, green energy, and supply chain logistics.
- Ecosystem Growth: Attracting global talent, startups, and institutional capital through incentives and partnerships.
Three landmark developments stand out:
- Stablecoin Regulation: The upcoming Stablecoin Ordinance, effective August 1, will bring Hong Kong-pegged stablecoins under HKMA supervision.
- RWA as Strategic Priority: Tokenizing physical assets like gold, carbon credits, and warehouse receipts is now a national-level initiative.
- Tax Incentives for Digital Funds: Tokenized ETFs and crypto funds enjoy stamp duty exemptions on secondary market trades—removing a major friction point for liquidity.
These moves signal Hong Kong’s intent to move beyond being a sandbox—it aims to be a full-scale digital financial marketplace.
How Virtual Assets Are Reshaping Brokerage Business Models
The market response has been immediate. After Guotai Junan International (01788.HK) became the first mainland-backed broker in Hong Kong to offer comprehensive virtual asset trading services, its share price surged from HK$1.24 to HK$7.02 within two days.
While the spike reflects investor sentiment, the underlying trend points to real business transformation. Brokers are not launching their own exchanges but are instead integrating with licensed platforms via omnibus accounts—offering clients access to Bitcoin (BTC), Ethereum (ETH), and select stablecoins under strict compliance protocols.
Regulated trading means:
- No exposure to high-risk altcoins or meme tokens.
- Full KYC/AML procedures aligned with SFC standards.
- Prohibition of trading by mainland Chinese residents.
- Investor education and suitability assessments built into onboarding.
Currently, 41 firms are authorized by the Securities and Futures Commission (SFC) to provide such services under an enhanced licensing regime:
- Type 1 (Upgraded): Distribution of virtual asset trading services.
- Type 4 (Upgraded): Investment advice on digital assets.
- Type 7 (Upgraded): Automated trading systems operating alongside VASP licenses.
- Type 9 (Upgraded): Management of funds holding over 10% in virtual assets.
👉 See how compliant market infrastructure is driving institutional adoption of digital assets.
Why Compliance Matters More Than Ever
Compared to offshore platforms like Binance or Coinbase, Hong Kong’s licensed brokers prioritize security and regulatory trust—not just trading volume.
Key advantages include:
- Assets held in professional custody with insurance coverage.
- Only audited, compliant tokens listed on regulated exchanges.
- Transparent transaction trails meeting anti-money laundering requirements.
However, challenges remain. Limited token selection and lower liquidity compared to global platforms can deter active traders. As one industry executive notes, “Platforms like Binance thrive on diversity and listing fees from new projects—Hong Kong’s model sacrifices breadth for safety.”
Still, for risk-conscious investors and institutions, this trade-off makes sense. The focus is long-term sustainability over short-term speculation.
Stablecoins: The Missing Link in Digital Finance
With the Stablecoin Ordinance taking effect in August 2025, Hong Kong is poised to launch its own regulated stablecoin ecosystem. Major players—including JD Chain, Circle-like fintechs, and traditional banks like Standard Chartered—are already preparing applications.
Globally, stablecoins have proven transformative. In 2024 alone:
- Total market cap exceeded $200 billion.
- Transaction volume hit $15.6 trillion—surpassing Visa and Mastercard combined (ARK Invest).
- Circle’s NYSE debut saw its valuation soar 675% in weeks.
But success hinges on distribution. As Li Lianxuan, Co-Partner at Hashkey Tokenisation, explains: “USDC grew because Coinbase gave it instant reach. Similarly, Hong Kong’s stablecoins will need strong distribution channels—licensed brokers and exchanges are perfectly positioned.”
Moreover, stablecoins aren’t just payment tools—they’re foundational infrastructure. When paired with tokenized money market ETFs (akin to “digital余额宝”), they enable yield-bearing use cases without sacrificing stability.
Previously, a 0.1% stamp duty made frequent trading uneconomical for low-yield products (e.g., 0.15% daily return). Now, with tax relief, turnover increases, liquidity improves, and adoption accelerates.
From Digital Tokens to Digital Twins: Bridging Real and Virtual Economies
Perhaps the most forward-looking aspect of Declaration 2.0 is its embrace of real-world asset (RWA) tokenization—what Dr. Xiao Feng calls “digital twin assets.”
This concept involves representing physical or legal rights as blockchain-based tokens:
- Gold reserves → Tokenized bullion
- Green energy credits → Tradable carbon tokens
- Warehouse receipts → Digitized inventory claims
- Government bonds → Programmable fixed-income instruments
By bringing traditional assets on-chain, Hong Kong enables 24/7 settlement, fractional ownership, automated compliance, and cross-border interoperability.
For example:
- A small investor could buy 0.01% of a solar farm via tokenized shares.
- A logistics firm could tokenize shipping containers for instant financing.
- A pension fund could allocate to tokenized real estate with daily liquidity.
This convergence of Web3 and traditional finance isn’t theoretical—it’s already happening in pilot programs across commodities, private credit, and infrastructure.
Frequently Asked Questions
Q: What is the difference between Declaration 1.0 and 2.0?
A: While the original 2022 declaration focused on building basic regulatory guardrails and protecting retail investors, Declaration 2.0 shifts toward scaling the ecosystem—with clear support for RWA, stablecoins, tax incentives, and institutional participation.
Q: Can mainland Chinese residents trade crypto through Hong Kong brokers?
A: No. All licensed platforms prohibit account opening or trading by individuals based in mainland China due to cross-border regulatory restrictions.
Q: Are there tax benefits for digital asset investors in Hong Kong?
A: Yes. Starting in 2025, tokenized ETFs and certain digital funds are exempt from stamp duty on secondary market transactions—a major boost for liquidity and investor appeal.
Q: How does Hong Kong’s stablecoin regulation compare to the U.S.?
A: Both regions are moving toward formal oversight—the U.S. passed the GENIUS Act in June 2025, while Hong Kong’s Stablecoin Ordinance takes effect August 1. Both emphasize reserve transparency and issuer accountability.
Q: What types of real-world assets are being tokenized in Hong Kong?
A: Priority sectors include precious metals, green energy certificates, trade finance instruments, warehouse receipts, and government-backed securities.
Q: Is Hong Kong competing with Singapore or Dubai in digital assets?
A: Yes—but with a distinct advantage: deep integration with China’s financial system and strong rule-of-law traditions make it uniquely positioned for institutional-grade digital finance.
👉 Explore how next-generation financial infrastructure is redefining global capital flows.
Conclusion: A New Era of Institutional Web3
Hong Kong’s digital asset ambitions go far beyond crypto trading. With Declaration 2.0, it’s laying the groundwork for a hybrid financial system where blockchain enhances—not replaces—traditional markets.
Through clear regulation, targeted incentives, and strategic partnerships, Hong Kong is building a trusted gateway between East and West, physical and digital, legacy finance and Web3 innovation.
The journey is just beginning—but the direction is clear: Hong Kong isn’t just joining the digital asset revolution. It aims to lead it.
Core Keywords: digital asset hub, stablecoin regulation, RWA tokenization, Hong Kong Web3, tokenized ETFs, virtual asset licensing, LEAP framework, crypto taxation