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Join WhatsApp channelHong Kong is poised to release a plethora of policy documents and advisories pertaining to tokenized assets, stablecoins, and the trading of cryptocurrencies, as it strives to position itself as a leading web3 hub in Asia.
Christopher Hui, the Secretary for Hong Kong’s Financial Services and the Treasury, shared during the Hong Kong Fintech Week that the government remains committed to fostering innovation in web3 technologies. He emphasized that the recent regulatory actions against the JPEX crypto exchange have not wavered this commitment.
“We’ve received numerous inquiries about whether the situation with JPEX will deter us from our web3 ambitions,” Hui remarked. “I can say unequivocally, it will not.”
He also noted that the Securities and Futures Commission is on the verge of publishing advisories aimed at entities involved in activities related to tokenized securities, as well as tokenization of investment products approved by the SFC.
Hui highlighted another focal point for regulators, which is to broaden their regulatory scope to encompass the purchase and sale of virtual assets beyond the confines of trading platforms.
He also shared that the Hong Kong Monetary Authority and the Financial Services and the Treasury Bureau are gearing up to launch a joint consultation on the regulatory framework for stablecoin issuers.
Eddie Yue, the Chief Executive of the HKMA, expressed at the event that applications such as tokenized bonds have transcended the proof of concept phase, finding application in actual transactions.
“We took a major step earlier this year, assisting the government in issuing the world’s inaugural tokenized government green bond,” Yue stated. “This was a demonstration of how Hong Kong’s legal and regulatory infrastructure is compatible with this novel format of issuance.”
Yue also revealed ongoing discussions with industry players to explore future tokenized issuances, aiming to unveil new opportunities.
“Looking ahead, we anticipate a surge in tokenization to facilitate gradual adoption,” Yue predicted. “I foresee a wider adoption of blockchain-driven payment methods, including options like stablecoin wallets or tokenized deposits offered by banks.”
Julia Leung, the Chief Executive Officer of the SFC, also mentioned that the regulatory body is set to release two advisories on tokenization later today.
One advisory will address the risks associated with this emerging technology and set clear expectations for intermediaries in terms of due diligence and procedures for transferring or initially issuing tokens.
Leung elaborated that the second advisory will detail the SFC’s requirements for issuing authorized funds, including additional safeguards.
“It’s crucial to ensure safe custody transfer of assets and maintain accurate ownership records, given the novelty of this technology,” Leung said.
“While we are encouraging the industry to experiment and develop new use cases, we are also mindful of the new risks that come with innovative technologies, especially in the areas of asset transfer, ownership, and recordkeeping.”
