The Hong Kong government has pledged to promote the public adoption of licensed stablecoins, unveiling a broad set of new digital asset (DA) policies as the city seeks to cement its role as a global cryptocurrency hub while serving as a test bed for Beijing鈥檚 fintech aspirations.
In the 鈥淧olicy Statement 2.0 on the Development of Digital Assets in Hong Kong鈥 released on Thursday, the government called for market proposals to test stablecoin applications in public scenarios and a legislative proposal to expand tax concessions on profits from blockchain assets.
The blueprint set a 鈥渧ision for digital asset development and showcases the practical use of tokenisation through application, with a view to boosting the diversification of use cases鈥, said Financial Secretary Paul Chan Mo-po.
Starting from the 2025-26 financial year, privately offered funds and family-owned investment holding vehicles could claim tax breaks on profits from transactions involving cryptocurrencies and tokenised securities 鈥 bringing digital assets into parity with traditional assets such as stocks and bonds 鈥 pending approval by the Legislative Council.
Under the plan, the government would support testing new stablecoin use cases given the strong corporate interest, especially in cross-border trade and settlement, according to the document. The government-backed start-up incubator Cyberport would also launch a new funding scheme to support high-impact blockchain and digital asset projects.
The government said that regulators, law enforcement agencies and technology providers would collaborate to develop digital asset infrastructure.
The move comes as Hong Kong鈥檚 regulatory regime for stablecoins 鈥 cryptocurrencies that are pegged to a reference asset, typically a fiat currency such as the US dollar 鈥 is set to take effect on August 1, making it the first of its kind globally.
Officials have also been working to accelerate their goals for tokenisation, which puts traditional assets on a blockchain. The government plans to regularise the issuance of tokenised government bonds and encourage the tokenisation of a wider range of assets, including precious and non-ferrous metals and renewable energy projects.
鈥淒igital assets hold great development potential with significance to fintech,鈥 Chan said. 鈥淭hrough the adoption of blockchain technology, more efficient financial transactions at a lower cost can be realised to bring in more inclusive financial services.鈥
Hong Kong aimed to build a 鈥渇lourishing鈥 digital asset ecosystem that connected the real economy and daily life through regulation and market innovation, strengthening the city鈥檚 position as a leading international financial centre, he added.
鈥淭he framework 鈥 helps us leap towards a trusted, sustainable and deeply integrated digital assets ecosystem embedded within the real economy,鈥 said Secretary for Financial Services and the Treasury Christopher Hui. 鈥淚t also keeps Hong Kong at the forefront of digital transformation, offering a clear road map for businesses and investors to thrive in a secure and vibrant DA market.鈥
Eugene Cheung, chief commercial officer of the licensed crypto exchange operator OSL, said the tax concessions showed a 鈥減roactive response to market demand鈥, and reinforced Hong Kong鈥檚 鈥渁mbition to become a premier wealth management and Web3 hub鈥. Hong Kong was also establishing a robust ecosystem for tokenised assets by providing a clear legal framework, he added.