Hong Kong moves to loosen digital-asset rules and launch tokenisation pilot to boost liquidity

2 November 2025

Hong Kong has announced a major shift in its regulatory approach toward virtual assets, unveiling relaxed rules for locally licensed trading platforms and launching a new tokenisation pilot scheme as part of the city’s bid to become a leading global fintech and digital-asset hub. At a fintech forum broadcast from Hong Kong on 3 November, the Securities and Futures Commission (SFC) confirmed that domestic-licensed virtual asset trading platforms known as VATPs will now be permitted to integrate order books with overseas affiliated platforms, effectively allowing them to tap global liquidity. Previously these platforms faced restrictions that required their order books to be ring-fenced within Hong Kong, limiting their reach and access to broader trading flows.

In addition, the regulator announced that VATPs would be allowed to distribute virtual assets and stablecoins regulated in Hong Kong even if those assets have less than a one‐year track record, provided they are offered to professional investors. Until now, such offerings had to meet the minimum one-year history requirement, creating a chilling effect on newer token projects looking for a regulated foothold. The regulatory rollback is part of a broader programme unveiled by the Hong Kong Monetary Authority (HKMA) called “Fintech 2030,” which places tokenisation, data analytics and artificial intelligence at the core of Hong Kong’s ambitions in the coming decade.

Under the Fintech 2030 roadmap, HKMA said the city will accelerate development around real-value tokenisation use cases such as tokenised money market funds and deposits and expand its incubator platform to enable live digital-asset transactions. HKMA chief executive Eddie Yue emphasised that the new sandbox environment will now include applications of tokenised deposits and digital‐asset settlement. He noted that total fintech investment in Hong Kong is projected to exceed HK$100 billion (around US$12.9 billion) annually over the next three years.

The move comes amid a global wave of interest in tokenised financial products. According to bank executives present at the forum, tokenised gold and money market funds marketed via Hong Kong have seen strong traction. For example, HSBC reported that its tokenised gold product launched in the city is now ranked the third-largest globally. Bill Winters, CEO of Standard Chartered, remarked that many transactions will eventually settle on blockchain technology and digital money will become the norm.

Market participants welcomed the regulatory changes as a signal that Hong Kong is embracing innovation and preparing to contend with other fintech hubs such as Singapore and London. By allowing greater flexibility for trading platforms, enabling new tokenisation use cases and integrating with global liquidity pools, Hong Kong is positioning itself as a bridge between mainland China’s financial system and international capital markets. One strategist described the reforms as “a leap forward in building digital-asset infrastructure in the city.”

However the reforms are not without risk. Token-based financial instruments carry heightened operational, regulatory and market risks, including volatility, cybersecurity threats and questions about settlement finality. Some industry observers caution that accelerating token offerings with less track record may increase investor vulnerability, particularly in jurisdictions with evolving oversight frameworks. Nonetheless, Hong Kong’s authorities appear confident that their phased, sandbox-based approach will balance innovation with risk containment.

For institutional investors and fintech firms the new regime creates both opportunity and challenge. On one hand, access to deeper liquidity, fewer track-record constraints and a favourable regulatory narrative make Hong Kong an attractive launch pad for tokenised products targeting Asian and global markets. On the other hand, firms must navigate evolving governance, maintain compliance across jurisdictions and address investor protections in a landscape still in flux.

In broader economic terms, the development aligns with China’s strategy to deepen integration of the digital economy and shift financial flows through Hong Kong. By enhancing the city’s utility as a financial gateway, the reforms may help redirect capital, digital-asset innovation and fintech talent toward the region. The expectation that tokenisation will scale into mainstream deposit, trading and settlement infrastructure underscores the ambition.

As Hong Kong moves from concept to execution, the next phases to watch include how quickly tokenised products are adopted, whether global platforms establish local hubs, and how regulatory transparency and enforcement evolve. Implementation will be crucial: can Hong Kong convert regulatory flexibility into commercial viability while maintaining investor trust and market integrity?