Today, the Hong Kong government rolled out a multi-year roadmap on digital asset development in the country. In a 2.0 policy statement released, the Hong Kong government reaffirmed it commitment to transforming the country to become a global hub for innovation in the digital asset industry.
The statement outlined the Hong Kong government’s goal of developing a trusted and innovative digital asset ecosystem free from risk. It also prioritizes investors’ protection while delivering concrete benefits to the real economy and financial markets.
Hong Kong introduces LEAP framework
The statement also introduced a new framework identified as LEAP. As revealed, the framework aims to enhance the efficiency of legal and regulatory processes while broadening the range of tokenized products available. The LEAP also seeks to promote the advancement of stablecoin use cases through cross-sector collaboration, fostering the development of both people and partnerships.
The first arm of the LEAP framework, legal and regulatory streamlining includes the establishment of a comprehensive and unified regulatory framework for digital assets service providers. It also covers digital assets exchange, stablecoin issuers, digital asset dealing service provider, and DA custodian service providers. In addition, the Hong Kong Securities and Futures Commission (SFC) will oversee the issuance of licenses to digital assets dealing service providers and custodian service providers.
Another policy in the LEAP framework is expansion of the suite of tokenized products. As revealed, the government plans to regularise the issuance of tokenized government bond. The government also plans to encourage the tokenization of real-world assets (RWAs) to improve liquidity and accessibility. This will be achieved through various initiatives, including the clarification of the stamp duty treatment for tokenized exchange-traded funds (ETFs).
The Hong Kong government through the framework also plans to encourage collaboration among regulators, law enforcement agencies and technology providers for advancement of digital asset infrastructure. Also, by strengthening partnerships with industry and academia, the government aims to enhance talent development and position the country as a hub of excellence for digital asset knowledge-sharing and international cooperation.
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