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Wu Jiezhhuang: Hong Kong Digital Asset Development Policy Declaration 2.0 Goals Clarified, Helping Industry Development https://news.rthk.hk/rthk/ch/component/k2/1810796-20250626.htm

The Hong Kong Special Administrative Region Government's release of the 'Hong Kong Digital Asset Development Policy Declaration 2.0' showcases its strategic vision to build a globally leading digital asset center, with the core aim of establishing a trustworthy, sustainable digital asset ecosystem deeply integrated with the real economy through the 'LEAP' framework (Legal and Regulatory Optimization, Tokenized Product Expansion, Application Scenario Promotion, Talent and Partner Development).
I have the following observations:

1. Clearly uses the term 'digital assets' (replacing 'virtual assets') to align with international standards, emphasizing its innovative leadership as an international financial center in the digital age.

2. The goal is very clear: to balance innovation with risk management, attract high-quality global institutions; and enhance financial market efficiency through technologies like tokenization to serve the real economy.

3. Responsibilities are clearly defined, with the Securities and Futures Commission leading the issuance of licenses for digital asset trading and custody services, while the Monetary Authority regulates banking-related activities to avoid functional overlaps.

4. The government has demonstrated its friendliness and recognition of digital assets, and will submit legislative proposals to include digital assets in private placement funds and family investment control tools that qualify for profits tax exemptions. Additionally, the SAR government will actively promote the regularization of tokenized government bond issuance.

5. Realistically reducing operational costs for the industry and striving to enhance market liquidity, the government will clarify how the stamp duty exemption measures for ETF transfers will also apply to tokenized ETFs, which will have a profound impact on the digital asset industry.

6. Substantial cash support to improve the market ecosystem, Cyberport will launch a blockchain and digital asset pilot funding scheme, which not only can attract more talent to join the industry but also enhance the overall project pool in Hong Kong.

In summary, Hong Kong has a great opportunity to become a benchmark for compliant innovation in digital assets in Asia within 3-5 years, providing a 'Hong Kong solution' for the integration of global traditional finance and the digital economy.

The Hong Kong Special Administrative Region Government's release of the 'Hong Kong Digital Asset Development Policy Declaration 2.0' demonstrates its strategic vision of building a global leading digital asset center. The core is to construct a trustworthy, sustainable, and deeply integrated digital asset ecosystem with the real economy through the 'LEAP' framework (Legal and Regulatory Optimization, Tokenized Product Expansion, Application Scenario Advancement, Talent and Partnership Development).
I have the following observations:

1. It clearly uses the term 'digital assets' (instead of 'virtual assets') to align with international standards, emphasizing its innovative leadership in the digital age as an international financial center.

2. The goal is very clear: to balance innovation with risk management, attract high-quality global institutions, and enhance financial market efficiency through technologies such as tokenization to serve the real economy.

3. The division of responsibilities is clarified, with the Securities and Futures Commission leading the licensing of digital asset trading and custody services, and the Monetary Authority regulating banking-related activities to avoid functional overlap.

4. It showcases the government's friendliness and recognition of digital assets. The government will submit legislative proposals to include digital assets in private placement funds and family investment control tools eligible for profits tax exemption. Meanwhile, the Special Administrative Region Government will take the initiative to normalize the issuance of tokenized government bonds.

5. The government is genuinely reducing industry operating costs and striving to enhance market liquidity. It will clarify how the stamp duty exemption measures for the transfer of ETFs will also apply to tokenized ETFs, which will have a profound impact on the digital asset industry.

6. Substantial cash support will improve the market ecosystem. Cyberport will launch funding programs for blockchain and digital asset perspectives, which will not only attract more talent to the industry but also enhance the overall project pool in Hong Kong.

In summary, Hong Kong has a great opportunity to become a benchmark for compliant innovation in digital assets in Asia within 3-5 years, providing a 'Hong Kong solution' for the integration of global traditional finance and the digital economy.

After years of effort, the passage of the "Stablecoin Regulation" marks further improvement of Hong Kong's regulatory framework for crypto assets, demonstrating Hong Kong's foresight in balancing financial innovation and risk management. As a regulator, the Monetary Authority has a clear positioning for stablecoins—they are a payment tool rather than an investment product. This definition helps the public rationally understand their functional boundaries.

The regulation is based on international standards, setting a high threshold for the licensing system, emphasizing "substantive application scenarios" and "business sustainability." This not only filters out compliant and capable issuers but also avoids market overheating that could trigger risks. I particularly commend the Monetary Authority for communicating regulatory expectations with the industry in advance through the "sandbox" and clearly stating that participation in the sandbox will not be linked to licensing, reflecting the rigor and transparency of the approval process.

I believe the future challenge lies in the effective connection between regulation and actual application scenarios. Currently, the traditional financial system and the settlement of stablecoins are still in an adaptation phase. Future breakthroughs are needed in the convenience, operability, and prevention of financial risks associated with stablecoins so that the influence of compliant stablecoins in Hong Kong can be expanded. Additionally, I suggest that Hong Kong can learn from the cross-border coordination experience of the EU's MiCA while continuously monitoring market changes and adjusting guidelines in a timely manner.

Overall, this move lays the foundation for Hong Kong to consolidate its position as a fintech hub, but it is necessary to maintain a balance between promotion and risk warnings to ensure the healthy development of the industry.

Thank you to Hong Kong Chief Executive John Lee for leading the Middle East business delegation to participate in the inspection and exchange in Qatar. Today, I am honored to represent my group company to sign a memorandum of cooperation with the mainland super unicorn WeBank and the local payment group in Qatar, under the witness of the Chief Executive and the leaders of Qatar, becoming a case of achieving trilateral cooperation. I also thank the SAR government for providing this opportunity, facilitating a practical case of 'internal connection and external communication'.

I have always believed that Hong Kong is not only a 'super connector' but also a 'super accelerator'. An accelerator means not only connecting cooperation but also providing core advantages to global partners. Hong Kong is an international financial center, and it will also become an international virtual asset and Web3 center. I believe that Hong Kong's 'one country, two systems', along with multiple advantages such as professional services, international talent, and a sound legal system, will definitely accelerate its positioning as a hub for international connectivity and assist mainland and Hong Kong enterprises to rapidly go global!