In June 2025, the Hong Kong Special Administrative Region government released the Digital Asset Development Policy Declaration 2.0 (referred to as "Declaration 2.0"), marking a pivotal step in its ambition to become a global leading digital asset hub. This updated policy is not merely a revision of the 2022 version—it represents a comprehensive strategic upgrade focused on reshaping the regulatory landscape, adopting international standards, and creating secure, efficient pathways for institutional investors. At its core, the declaration seeks to strike a precise balance between innovation promotion and risk management, laying the foundation for a sustainable, globally trusted digital finance ecosystem.
A Trusted Hub for Innovation and Real-World Impact
The Declaration 2.0 clearly positions Hong Kong as a trusted and innovation-driven digital asset center—a vision built on three foundational pillars:
- Risk-Controlled Innovation: Advancing technological progress within a secure and regulated environment.
- Real-World Integration: Ensuring digital assets serve tangible economic and financial markets.
- Global Trust: Establishing a market framework aligned with international regulatory standards.
To operationalize this vision, Hong Kong introduced the LEAP framework, a holistic strategy designed to cultivate a resilient and deeply integrated digital asset ecosystem:
L: Legal & Regulatory Streamlining
Streamlining laws and regulations to create clarity, reduce fragmentation, and eliminate regulatory arbitrage.
E: Expanding Tokenised Products
Broadening the range of tokenized financial instruments, from ETFs to government bonds and real-world assets (RWA).
A: Advancing Use Cases & Collaboration
Driving practical applications across industries and fostering cross-sector partnerships.
P: People & Partnership
Investing in talent development and building global alliances to sustain long-term growth.
This shift from isolated market initiatives to a full-fledged ecosystem reflects Hong Kong’s ambition to connect technological innovation with real economic value.
Regulatory Overhaul: Building a Unified, Global-Ready Framework
One of the most significant aspects of Declaration 2.0 is its systemic overhaul of the regulatory architecture, directly addressing long-standing issues like market fragmentation and compliance uncertainty.
1. Unified Regulatory Oversight
Hong Kong is moving toward a comprehensive, end-to-end regulatory model that covers:
- Digital asset exchanges
- Stablecoin issuers
- Trading service providers
- Custodial service providers
Clear regulatory roles have been defined:
- The Securities and Futures Commission (SFC) oversees trading and custody services.
- The Hong Kong Monetary Authority (HKMA) regulates bank-related digital asset activities.
A new licensing regime for custodians and trading platforms is under public consultation, aiming to eliminate loopholes and ensure consistent supervision.
2. “Same Business, Same Risk, Same Rules” Principle
This cornerstone principle ensures that digital asset activities face the same regulatory scrutiny as their traditional financial counterparts when they pose equivalent risks. This alignment removes barriers for traditional financial institutions looking to enter the digital asset market in a compliant manner.
3. Alignment with Global Standards
Hong Kong has committed to implementing four key international frameworks:
- IOSCO’s Policy Recommendations on Crypto and Digital Asset Markets
- FSB’s Regulatory Framework for Global Crypto-Asset Activities
- BCBS’s Prudential Treatment of Crypto-Asset Exposures
- OECD’s Crypto-Asset Reporting Framework (enhancing tax transparency)
This integration significantly boosts Hong Kong’s credibility and provides multinational firms with predictable compliance pathways.
Enabling Institutional Participation: Solving Key Bottlenecks
The declaration directly targets the main obstacles preventing large-scale institutional adoption.
1. Asset Security: Standardized Custody
The SFC will serve as the primary regulator for custodial services, setting uniform security standards for private key management, asset segregation, and operational resilience. The HKMA will concurrently oversee banks’ custody activities, ensuring institutional-grade protection.
2. Liquidity Infrastructure: A Multi-Tiered Market
To meet institutional demand for deep liquidity:
- Wholesale trading mechanisms are being encouraged under the new framework.
- Digital asset indices (e.g., Bitcoin, Ethereum) launched by HKEX provide transparent pricing benchmarks.
- The HKMA’s “Ensemble” project is developing infrastructure for tokenized deposit settlement, improving capital efficiency.
3. Tax Efficiency: Removing Financial Frictions
Two major tax initiatives are underway:
- Stamp duty exemption for tokenized ETFs, mirroring existing rules for physical ETFs.
- Proposed profits tax exemption for specific digital asset transactions within private funds and family investment vehicles (targeted for 2025/26 tax year).
These measures reduce costs and improve return predictability.
4. High-Quality Underlying Assets
Hong Kong is creating a robust pipeline of trusted digital assets:
- Tokenized government bonds will be issued regularly, building on the success of two green bond tranches totaling HK$6.8 billion.
- Real-world asset (RWA) tokenization is expanding into gold, base metals, solar energy revenue rights, and even London Metal Exchange (LME)-registered warehouse receipts—linking digital finance directly to physical markets.
👉 Explore how tokenized real-world assets are transforming institutional investment strategies.
Balancing Innovation and Risk: The Dual Engine of Growth
Hong Kong’s strategy thrives on a dual approach—fostering innovation while reinforcing safeguards.
Innovation Enablers: Testbeds and Incentives
- Government-led pilots: Regular issuance of tokenized bonds demonstrates commitment and builds market confidence.
- Tax incentives: Stamp duty and profits tax exemptions lower the cost of compliance-driven innovation.
Infrastructure support:
- Digital Harbour’s Blockchain & Digital Asset Pilot Funding Scheme supports flagship projects.
- The Investment Promotion Office offers “one-stop” assistance for digital asset firms.
- The HKMA’s “Ensemble” project collaborates with the SFC to build next-gen financial infrastructure.
Risk Mitigation: Firewalls and Surveillance
- Strict stablecoin regulation: Starting August 1, 2025, stablecoin issuers must meet rigorous requirements for reserve management, redemption mechanisms, and risk controls.
- RegTech advancement: Support for local development of regulatory technology, cybersecurity tools, and monitoring systems.
- Cross-agency collaboration: Enhanced coordination between regulators, law enforcement, and tech providers.
- International cooperation: Active participation in global forums and bilateral MOUs to combat cross-border risks.
Regular legal reviews by the Financial Services and Treasury Bureau ensure frameworks evolve with technology and investor needs.
Talent and Knowledge: Fueling the Digital Finance Ecosystem
Sustainable growth depends on human capital and knowledge exchange.
Dual-Track Talent Strategy
- Local development: Universities are launching interdisciplinary programs in blockchain, AI, and digital assets. Digital Harbour runs training and accelerator programs in Web3 technologies.
- Global attraction: “Fintech professionals (including digital assets)” remain on Hong Kong’s talent list, inviting top international experts.
Knowledge Hub Ambition
Hong Kong aims to become a global center for research on:
- Blockchain applications
- Tokenization frameworks
- AI-powered financial tools
Collaborative research between academia and industry is encouraged to drive innovation.
Expanding Collaboration Networks
- Cross-sector partnerships: Digital Harbour collaborates with Ensemble to incubate startups.
- Cross-border engagement: Hong Kong actively participates in international organizations and regulatory dialogues to shape global norms.
Conclusion: A Strategic Leap Forward
The Digital Asset Development Policy Declaration 2.0 is more than a policy update—it is a strategic leap (LEAP) designed to position Hong Kong at the forefront of global digital finance. Its enduring value lies in:
- Lowering institutional barriers through unified regulation, secure custody, tax efficiency, and liquidity support.
- Defining the gold standard for balancing innovation with safety via internationally aligned rules.
- Pioneering the “Digital Assets +” era by anchoring value in real-world assets like commodities, energy, and government debt.
Hong Kong is demonstrating that a major financial center can embrace cutting-edge innovation without compromising stability. By offering secure, efficient, and compliant entry points for institutional capital, it is not only strengthening its own financial leadership but also contributing a vital blueprint—the “Hong Kong Model”—for the future of global digital asset regulation.
Frequently Asked Questions (FAQ)
Q: What is the main goal of Hong Kong’s Digital Asset Declaration 2.0?
A: The primary goal is to establish Hong Kong as a global leader in digital assets by building a trusted, regulated ecosystem that supports innovation while ensuring financial stability and institutional participation.
Q: How does Hong Kong plan to attract institutional investors?
A: Through standardized custody rules, tax incentives, tokenized high-quality assets (like government bonds), multi-tiered liquidity solutions, and alignment with international regulatory standards.
Q: What role do real-world assets (RWA) play in this strategy?
A: RWA tokenization bridges digital finance with physical markets—enabling investments in gold, energy revenue, or commodities via blockchain—thereby creating sustainable, economically anchored digital products.
Q: When will stablecoin regulations take effect in Hong Kong?
A: The licensing regime for stablecoin issuers is set to begin on August 1, 2025, with strict requirements for reserves, redemption, and risk management.
Q: Is Hong Kong’s approach compatible with global financial regulations?
A: Yes. By adopting frameworks from IOSCO, FSB, BCBS, and OECD, Hong Kong ensures its rules are internationally recognized and interoperable.
Q: How is Hong Kong supporting talent development in digital assets?
A: Through university programs, industry-academia research partnerships, training initiatives at Digital Harbour, and maintaining fintech roles on its talent admission list.
👉 See how global investors are leveraging regulated markets to access tokenized assets securely.