Hong Kong’s Chief Executive has introduced the 2024 Policy Address, which highlights measures to strengthen the city’s virtual asset models. The government will continue to promote innovative financial services such as central bank digital currency (CBDC), mobile payment, virtual banking, virtual insurance, and virtual asset trading.
Cross-border payment solutions using CBDCs will also be advanced, with the Hong Kong Monetary Authority (HKMA) actively testing and exploring additional technical solutions and scenarios for cross-border trade settlements via the “Multi-Central Bank Digital Currency Cross-Border Network” (mBridge).
To enhance the regulation of virtual asset transactions, the Treasury Bureau will complete its second round of consultations on over-the-counter virtual asset transactions and propose a licensing framework for virtual asset custody service providers. The government will also encourage the tokenization of real-world assets and expand the digital currency ecosystem.
The HKMA is advancing the “Ensemble” financial market infrastructure project to explore tokenization of real-world assets and using digital currencies for interbank settlements. Additionally, the HKMA is allowing potential issuers to test their business models in the “Stablecoin Issuer Sandbox” and, alongside the Treasury Bureau, plans to submit legislation this year to regulate fiat stablecoin issuers.
Lastly, measures for promoting the digital securities market will be taken up. The HKMA will introduce the “Digital Bond Subsidy Scheme” to incentivize financial institutions and issuers to adopt tokenization technology in capital market transactions.
