Cryptocurrency Advancements in Hong Kong: Preparations for Stablecoin Regulation and Introduction of Tokenized Bonds
Hong Kong has unveiled a comprehensive digital asset strategy called the LEAP framework, aimed at cementing its position as a leading global hub in crypto and fintech. The strategy, announced on June 20, 2025, is designed to establish clear legal structures, expand tokenized products, advance use cases, and nurture talent and partnerships.
### Timeline and Details
The LEAP framework, an acronym for Legal and Regulatory Streamlining, Expanding the Suite of Tokenized Products, Advancing Use Cases and Cross-Sector Collaboration, and People and Partnership Development, was introduced on June 20, 2025, with Declaration 2.0.
A significant milestone in the LEAP framework's implementation is the Stablecoin Ordinance, which comes into effect on August 1, 2025. This ordinance institutes a licensing regime for issuers of fiat-referenced stablecoins (FRS), requiring them to obtain licenses from the Securities and Futures Commission (SFC). This move brings regulatory clarity and oversight to stablecoin issuers, marking a transition from a crypto testbed to mature industrial development.
Hong Kong’s Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) are currently conducting a legal review to remove barriers for the issuance, transfer, and custody of tokenized real-world assets (RWAs), including government-issued bonds, precious metals like gold, renewable energy projects including solar panels, and tokenized ETFs.
The government plans to regularize the issuance of tokenized government bonds and promote tokenized ETFs by clarifying their stamp duty treatment and facilitating secondary market trading on licensed digital asset platforms or other channels. The framework also includes tax exemptions for tokenized ETFs and digital asset funds, encouraging institutional adoption and product diversification within the digital asset ecosystem.
### Stablecoin Licensing and Regulation
The stablecoin licensing regime, overseen by the SFC, aims to mitigate risks associated with algorithmic or uncollateralized stablecoin models and ensure compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) standards.
### Ecosystem Development
LEAP also supports expanding tokenization across multiple sectors, fostering cross-sectoral collaboration, and funding innovative blockchain and digital asset projects (e.g., via initiatives like Cyberport funding programs).
In summary, Hong Kong’s LEAP framework positions the city to become a global hub for compliant, scalable, and institutional-grade digital asset markets, integrating tokenized real-world assets into its financial infrastructure with robust regulation and incentives. This move gives Hong Kong a first-mover advantage in Asia, as the European Union's MiCA framework will regulate stablecoins starting mid-2025.
- The LEAP framework, introduced on June 20, 2025, aims to establish clear legal structures for digital asset markets in Hong Kong, including a licensing regime for stablecoin issuers.
- The Stablecoin Ordinance, effective from August 1, 2025, will require issuers of fiat-referenced stablecoins to obtain licenses from the Securities and Futures Commission (SFC), bringing regulatory clarity to the stablecoin industry.
- Hong Kong's Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) are currently reviewing laws to remove barriers for the issuance, transfer, and custody of tokenized real-world assets (RWAs), which include government-issued bonds, precious metals, renewable energy projects, and tokenized ETFs.
- The government's plans involve regularizing the issuance of tokenized government bonds, promoting tokenized ETFs, and offering tax exemptions for digital asset funds, measures designed to encourage institutional adoption and product diversification within the digital asset ecosystem.
- LEAP also supports ecosystem development by fostering cross-sectoral collaboration, expanding tokenization across multiple sectors, and funding innovative blockchain and digital asset projects, giving Hong Kong a first-mover advantage in Asia as the European Union's MiCA framework for stablecoins is planned to start mid-2025.
