Hong Kong advances digital asset hub bid with new bonds

Hong Kong is set to issue its third batch of tokenized green bonds, as part of a broader plan to normalize the issuance of tokenized government bonds in the future and provide incentives for the tokenization of real-world assets (RWAs), including exempting stamp duty on the transfer of tokenized exchange-traded funds (ETFs).

Speaking at the Hong Kong Digital Finance Awards 2025, Secretary for Finance and Treasury of Hong Kong, Christopher Hui Ching-yu, said that the government had issued green bonds in tokenized form twice already, in 2023 and 2024, and that the third batch of tokenized bonds is being prepared, according to a July 5 report by state-owned Beijing newspaper Wen Wei Po.

Hui added that the Hong Kong government will also promote the tokenization of a wider range of assets and financial instruments to demonstrate the diverse applications of tokenization technology in different sectors, including precious metals, non-precious metals, and renewable energy (such as solar panels).

Hong Kong’s race to be a hub

Despite mainland China’s reticence to embrace digital assets—other than the digital yuan, the country’s government-controlled central bank digital currency (CBDC)—Hong Kong has, in contrast, set itself the task of becoming a digital asset hub for the region.

In January, the Hong Kong Monetary Authority (HKMA), Hong Kong’s central bank, launched a new initiative to support local banks as they launch blockchain products, with tokenization being a core focus once the incubator begins. The HKMA described the incubator as a “new supervisory arrangement” that will allow local banks to “maximize the potential benefits of DLT adoption by effectively managing the associated risks.”

This was just the latest in several initiatives launched by the HKMA targeting digital assets and blockchain, another being a stablecoin sandbox launched by the central bank in March of last year.

The special administrative region continued to ramp up its efforts in 2025. In May, Hong Kong legislators passed the ‘Stablecoin Ordinance’, making it the first major economy with an act fully dedicated to stablecoins. When it takes effect, in August, it will bring a comprehensive licensing regime, with any entity issuing stablecoins in Hong Kong (or issuing Hong Kong dollar-referenced stablecoins anywhere in the world) henceforth needing to obtain a license from the central bank. Unlicensed issuance or advertising will be a criminal offense. In addition, issuers must maintain a one-to-one reserve backing with high-quality liquid assets, provide clear redemption rights, and implement robust anti-money laundering (AML) controls. They also set a high bar to entry, with the law mandating paid-up capital of at least HKD25 million ($3.19 million), or one percent of coins outstanding for non-banks, plus a separate pool of reserve assets with a market value equal to or exceeding the par value of outstanding stablecoins, to maintain a robust 1:1 backing.

More recently, in June the Securities and Futures Commission (SFC), Hong Kong’s top finance sector regulator, announced plans to permit digital asset derivatives for professional investors, as part of the broader strategy to expand product offerings and reinforce the territory’s growing status as fintech hub.

Later in the month, the Hong Kong government released its “Policy Statement 2.0 on the Development of Digital Assets in Hong Kong,” further underscoring the territory’s ambitions. Amongst other measures, it introduced the new ‘LEAP’ framework that doubles down on stablecoin and asset tokenization policies, as well as unifying its regulatory framework for all virtual asset service providers (VASPs).

During his speech last week, Hui Ching-yu reportedly highlighted the new policy statement as an example of how Hong Kong has been gradually building a regulatory framework that balances risk management and investor protection, as well as industry development, to promote the sustainable development of the territory’s digital asset ecosystem.

In addition to all this, there is the announcement of the impending issuance of a third batch of tokenized green bonds, and Hong Kong appears to be laying down a significant marker for other jurisdictions keen to make the most of the digital asset space.

Watch: Tim Draper talks tokenization with Kurt Wuckert Jr.