Hong Kong will prioritize tokenization and stablecoins in boosting the country’s web3 ecosystem, says Financial Services Secretary, Christopher Hui.
According to a South China Morning Post report, Hong Kong Secretary for Financial Services and the Treasury Christopher Hui Ching-yu considers tokenization to be one of the “defining trends” that he believes could transform the country’s traditional financial markets, driving it into a web3 ecosystem.
Hong Kong has made strides to advance itself into a crypto hub, namely through issuing licenses to virtual asset trading platforms and made it possible for companies to issue tokenized investment products. Tokenization allows traders to gain ownership of real-world assets through purchasing on-chain tokens.
Earlier this month, the Hong Kong arm of China Asset Management said it was granted approval from the Hong Kong SFC to offer customers a tokenized money market fund that retail investors can also access. According to the report, the company stated that the fund will launch at the end of February.
In August 2024, the Hong Kong Monetary Authority launched a sandbox initiative dubbed “Project Ensemble Sandbox” that is designed to test and refine the use of tokenized money for interbank settlements and transactions involving tokenized assets.
In March 2024, the Hong Kong Shanghai Banking Corporation issued its first tokenized gold offering called HSBC Gold Token. The product was offered to retail customers in Hong Kong.
Hong Kong prioritizing stablecoins
Christopher Hui also reaffirmed Hong Kong’s commitment to developing stablecoins pegged to traditional fiat. The move is similar to other countries like the United States, which have increased its focus on drafting stablecoin regulations.
In December 2024, Hui introduced a stablecoin bill which would require stablecoin issuers to own reserves equal to the value of circulating stablecoins in the market. Additionally, it gives the HKMA power to distribute stablecoin issuer licenses to companies.
On Feb. 5, Hong Kong lawmaker Johnny Ng urged the government to start creating more pro-crypto initiatives to boost its crypto industry in light of Trump’s pro-crypto administration. He warned Hong Kong would fall behind in the global race to develop crypto if it did not act fast.
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