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On June 26, 2025, the Hong Kong Special Administrative Region government released the "Hong Kong Digital Asset Development Policy Declaration 2.0", which not only reaffirmed the goal of building Hong Kong into a global digital asset innovation center but also made significant upgrades in policy framework and regulatory thinking. Compared to the "Virtual Asset Policy Declaration 1.0" in 2022, this 2.0 version is no longer satisfied with establishing an institutional "framework" but has comprehensively entered the "application leap" stage of deepening ecosystem and expanding boundaries. The policy has shifted from exploratory guidance to systematic deployment, releasing a clear signal of Hong Kong's efforts to enhance global competitiveness and promote the institutionalization of digital finance.
1. From "Virtual Assets" to "Digital Assets".
One of the most intuitive changes in the Policy Declaration 2.0 is the transition from "virtual assets" to "digital assets" in official terminology. This change is not a simple literal replacement but reflects the broadening of regulatory vision and the shift in focus. Compared to the "virtual assets" focused on native chain assets, the concept of digital assets is more inclusive, covering not only cryptocurrencies and stablecoins but also tokenized representations of various real-world assets. This change is both to align with international standards and to demonstrate that Hong Kong's regulators are actively embracing the major trend of physical asset digitization, viewing blockchain as an important tool for traditional financial digitalization.
The Policy Declaration 2.0 emphasizes from the beginning that Hong Kong's vision is to let innovation thrive in a controllable risk environment and bring substantial benefits to the real economy and financial markets. In other words, the new policy places more emphasis on the integration of virtual and real economies rather than isolated development. This positioning also explains why "stablecoins" and "tokenized real-world assets (RWA)" have become the core pillars of this policy: they are the natural bridges between digital assets and traditional finance and key links in transforming institutional construction achievements into market value.
2. Stablecoins and RWA Become Strategic Core.
Two years ago, the Hong Kong Monetary Authority first released a stablecoin regulatory discussion draft, which was still in the stage of conceptual construction and public consultation. Just two years later, Hong Kong has announced the formal implementation of a stablecoin licensing system in August 2025, with related regulations and regulatory details basically ready. This closed loop from research to legislation not only reflects the efficient pace of Hong Kong's regulatory execution but also makes it the first market in the Asia-Pacific region to achieve institutionalized stablecoin regulation.
The strategic positioning of tokenization in Declaration 2.0 has also significantly moved forward, becoming one of the most frequently appearing keywords. In the 1.0 stage, tokenization was still in the experimental verification phase. Hong Kong pioneered a small-scale issuance of tokenized green bonds, which was more of a concept verification. At that time, the Hong Kong government expressed openness to the legal attributes of tokenized assets but had no systematic planning. Entering the Policy Declaration 2.0, tokenization has clearly become one of the core pillars of Hong Kong's digital asset ecosystem. Not only has it proposed to normalize government tokenized bond issuance and explore issuance in different currencies and terms, but it has also expanded the tokenization objects from government bonds to a broader range of real-world assets, including gold, commodities, green energy assets, electric vehicle-related assets, etc. This leap from "exploratory nature" to "normal mechanism" means that Hong Kong is attempting to map real-world assets extensively onto the blockchain, breaking down the boundaries between traditional physical assets and digital assets through institutional innovation.
The Policy Declaration 2.0 also proposes to review the current legal framework to adapt to tokenization development, ensuring clear and robust legal status of tokenized asset ownership and smart contracts. These measures indicate that Hong Kong no longer views Web3 as a symbolic experiment but wants digital assets to truly serve the real economy and financial market innovation.
3. Trading and Custody System Upgrade: From Compliance Threshold to Infrastructure Improvement.
The key achievement of Declaration 1.0 was the implementation of a licensing system for virtual asset trading platforms, promoting the legalization of trading venues. Version 2.0 further proposes expanding the regulatory scope to include digital asset trading service providers and custody service providers, meaning regulation has moved from "having a license" to "full coverage", seeking to bridge the compliance differences between on-site and off-site, platforms and custody. This indicates that the regulatory goal has upgraded from "having a framework" to "framework without blind spots", aiming to eliminate regulatory arbitrage and ensure investor rights and market transparency are maintained regardless of the trading channel. It is worth noting that the 2.0 version declaration does not directly mention off-site trading regulation, which may be unified under digital asset service provider regulation or further clarified in subsequent detailed rules.
Digital asset custody, as a prerequisite infrastructure for institutional entry, is also systematically emphasized in the Policy Declaration 2.0. Initially, Hong Kong had not established specific regulations for custody, only proposing principle-based requirements for asset separation at exchanges. Now, custody service providers are set to be included in the licensing sequence, with regulatory objectives extending to specific dimensions such as custody technical specifications, asset security, insurance mechanisms, and compensation capabilities. According to the "A-S-P-I-Re" regulatory roadmap previously released by the Hong Kong Securities and Futures Commission, independent operation requirements for custody services will be introduced in the future, clarifying capital thresholds, risk isolation, and safety responsibilities. These changes will greatly enhance institutional investors' confidence in allocating digital assets in Hong Kong, allowing large funds and family offices to move beyond relying on trading platforms' risk control capabilities, thereby accelerating the "on-chain" process of mainstream finance.
4. Substantial Tax Incentives Enhance Hong Kong's Attractiveness.
This round of declaration also first proposed a tax incentive mechanism for digital asset products. In the future, if legislation passes, tokenized ETFs will enjoy stamp duty exemption equivalent to traditional ETFs, and capital gains from investments in digital asset funds will also receive tax exemptions. This measure is equivalent to providing equal treatment for digital assets and traditional financial products at the financial game rule level. In contrast, Declaration 1.0 did not involve specific tax incentives, only emphasizing that Hong Kong would use its sound legal and regulatory foundation to promote virtual asset sustainable development. Now, version 2.0 significantly enhances the attractiveness of Hong Kong's digital asset market through substantial tax benefits: encouraging more local tokenized product issuance and attracting global digital asset funds and family offices to allocate funds to Hong Kong's tokenized assets through a tax mechanism of "fine guidance".
Overall, from Policy Declaration 1.0 to 2.0, Hong Kong's digital asset regulation has achieved an evolution from "point to surface, from shallow to deep". Version 1.0 focused on solving the "whether or not" problem, establishing a basic regulatory framework to allow market participants to operate legally and compliantly. Version 2.0 focuses on "how good", supplementing shortcomings and expanding territories on the existing framework, promoting deep integration of digital asset markets and real financial markets. This evolutionary path aligns with Hong Kong's consistent regulatory philosophy: gradual progress, letting things develop naturally. By conducting early pilot tests to accumulate experience and decisively implementing comprehensive policies when the time is right, it avoids rash risks while not missing development opportunities.
In the future, as new digital asset products like RWA, stablecoins, and on-chain funds are institutionalized, whether Hong Kong can continue to provide an operating environment with legal protection, regulatory certainty, and market attractiveness will determine if it can progress from an "Asia-Pacific experimental field" to a "global standard setter". This depends not only on the implementation strength of policies but also tests the regulatory execution, market communication efficiency, and coordinated infrastructure construction capabilities.
