Hong Kong to Release Circulars on Tokenized Securities and Stablecoin Regulations

Hong Kong is resuming its measures to establish itself as a Web3 hub in Asia by issuing more policy papers and circulars on tokenized assets, stablecoins, and cryptocurrency trading.

The Securities and Futures Commission will soon release circulars on intermediaries engaging in tokenized securities-related activities and tokenization of SFC-authorized investment products.

Hong Kong Goes All-In on Web3 with New Crypto and Stablecoin Policies

Hong Kong is all set to establish a series of further policy papers and circulars relating to stablecoins, tokenized assets, and cryptocurrency trading as it seeks to recognize itself as a Web3 hub in the region said officials during Hong Kong Fintech Week. Hong Kong’s secretary of financial services and the Treasury, Christopher Hui, made the announcement at Hong Kong Fintech Week and also confirmed that the recent crackdowns on the JPEX crypto exchange have not affected its commitment to encouraging web3 innovation.

The Securities and Futures Commission is to release circulars on intermediaries who engage in tokenized securities-related activities, while the Hong Kong Monetary Authority, Financial Services, and Treasury Bureau will issue further joint consultations on regulatory regimes for stablecoin issuers.

Tokenized Bonds and the Future of Tokenization

According to Eddie Yue, chief executive of the Hong Kong Monetary Authority (HKMA), tokenized bonds have already moved beyond the proof-of-concept stage and have been used in real transactions. The government is now talking with the industry to explore the next tokenized issuance. As tokenization becomes more popular, consumers can expect a rise in the tokenization of differences, blockchain-based payment methods, as well as stablecoin wallets or tokenized deposits offered by banks.

However, new risks associated with innovative technology must also be addressed, said Julia Leung, CEO of the Securities and Futures Commission (SFC), adding that a circular explaining how to recognize risks and what regulators expect from intermediaries will be issued soon.

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