On January 21, 2026, with the snow still falling in Davos, Switzerland, a discussion about the future of global finance was heating up. Hong Kong's Financial Secretary, Paul Chan, announced to the world that Hong Kong expects to issue its first batch of stablecoin licenses within the year, reiterating its commitment to the principle of "same activities, same risks, same regulation." This statement is consistent with his public confirmation six months earlier, in December 2024, of plans to launch a stablecoin licensing system this year.
This soon-to-be-implemented policy is not an isolated move. In his speech at Davos, Paul Chan systematically outlined Hong Kong's strategic blueprint for digital assets: Since 2023, Hong Kong has issued licenses to 11 Virtual Asset Trading Platforms (VASPs), establishing a clear and compliant trading market; at the same time, the Hong Kong government has set an example by successfully issuing three tranches of tokenized green bonds totaling approximately US$2.1 billion (approximately S$2.7 billion), becoming a leading example of government-issued bonds globally. Furthermore, providing a testing ground for fintech innovation through a "regulatory sandbox" constitutes the third cornerstone of this strategy.
While the global real-world asset tokenization (RWA) sector experienced explosive growth in 2024, it generally faced the predicament of "praised but not adopted"—private network experiments were booming, but public, trustworthy, and highly liquid infrastructure remained lacking. At this juncture, Hong Kong's combination of "trading platform licenses, stablecoin licenses, and official tokenized bonds" reveals its deeper intentions: it is attempting to transcend its role as a mere cryptocurrency trading center and systematically build the first government-backed and clearly regulated "official road" for trillions of dollars of traditional financial assets to enter the digital world. This may be the most profound paradigm shift that the "Hong Kong solution" has brought to the global development of RWA.
I. Hong Kong's Three-Step Strategy: A Clear Compliance Path
Hong Kong's digital asset policy is not a spur-of-the-moment decision, but a well-structured, step-by-step long-term strategy. To understand its underlying logic, it is necessary to extend the timeline and see its clear path from "building venues" to "establishing connections" and then to "setting benchmarks."
The first step was to establish compliant trading venues. In June 2023, Hong Kong's licensing system for Virtual Asset Service Providers (VASPs) officially came into effect. As of Paul Chan's speech at Davos, Hong Kong had issued licenses to 11 platforms. This step was crucial, answering the question of "where assets can be traded compliantly," and bringing previously gray-area trading activities under the same stringent regulatory framework as traditional finance, including anti-money laundering and investor protection. This provides a safe and reliable "home ground" for all subsequent financial innovations.
The second step is to build compliant payment and value anchoring tools, namely stablecoins. The establishment of trading venues solves the "venue" problem, but an efficient connection between the digital asset world and the real economy still requires a stable "bridge." This is the significance of Hong Kong's upcoming stablecoin licensing system. Paul Chan, Financial Secretary of Hong Kong, explicitly stated that the relevant licenses are expected to be issued later this year. Similar to VASP licenses, stablecoin licenses aim to place digital asset activities that may involve payment and settlement functions under the principle of "same activity, same risk, same regulation." This means that stablecoins compliantly issued in Hong Kong in the future will be subject to strict regulation regarding their reserve asset management, redemption mechanisms, and operational transparency, thus becoming the "compliant capillaries" connecting DeFi liquidity and the traditional fiat currency world.
The third and most demonstrative step was the government's direct involvement in issuing authoritative benchmark assets. The three tranches of tokenized green bonds issued by the Hong Kong government, totaling US$2.1 billion, have significance far beyond financing itself. They declared to the global market that blockchain technology is not only applicable to cryptocurrencies but can also serve mainstream financial products backed by sovereign credit. These bonds, serving as an "official model," provided a complete template, from technical solutions and legal structures to regulatory approvals, for the tokenization of various assets such as real estate, private lending, and commodities. With its substantial scale, it demonstrated the feasibility of the technology and its acceptance by mainstream institutions.
These three steps form a logically consistent closed loop: first, defining a safe "playground" (VASP license); second, providing stable "universal leverage" (stablecoin license); and finally, having the most credible entity personally "demonstrate" (tokenized green bonds). This combination of measures demonstrates that Hong Kong is shifting from early defensive regulation to proactively building a top-level design for digital financial infrastructure.
II. Stablecoins and Green Bonds: Unlocking the Key to RWA's Scalability
In Hong Kong's RWA infrastructure blueprint, stablecoins and tokenized green bonds are not simply parallel components, but rather complementary and mutually supportive key elements. They respectively open up the "Ren and Du channels" for the large-scale application of RWA from the two dimensions of "liquidity" and "credit".
The role of stablecoins is to solve the core "pricing and settlement" problem in the RWA ecosystem. In the traditional DeFi world, highly volatile cryptocurrencies are difficult to use as stable units of account for long-term assets. The emergence of compliant stablecoins provides RWA with a digital mirror of its fiat value. Whether it's the distribution of bond interest, the subscription and redemption of asset shares, or refinancing as collateral, stablecoins can serve as efficient and programmable settlement tools. Once Hong Kong issues stablecoin licenses, it means that a batch of regulated, transparently audited, and well-reserve "digital Hong Kong dollars" or other fiat stablecoins will enter the market. This will greatly reduce the operational complexity and exchange rate risks for traditional institutions participating in RWA projects, clearing obstacles for large-scale capital inflows.
The value of the US$2.1 billion tokenized green bonds issued by the Hong Kong government lies in setting a "credit benchmark" and a "technological model." Firstly, leveraging the top-tier credit of the Hong Kong SAR government, it provides the strongest market education and credit endorsement for the entire concept of "asset tokenization." When investors see that even the most conservative government bonds can be issued, traded, and settled in token form, their acceptance of other asset classes will naturally increase significantly. Secondly, the issuance of these bonds inevitably involved a series of complex engineering processes, including selecting the underlying blockchain technology, writing smart contracts (for automatic interest payments and redemption at maturity), integrating compliant investor identity verification (KYC/AML) on-chain, and connecting with traditional custody and settlement systems (such as CMU). This proven technology-legal-regulatory solution can be directly referenced or reused by subsequent commercial institutions, significantly reducing trial-and-error costs.
More importantly, the combination of stablecoins and tokenized bonds can give rise to entirely new financial scenarios. For example, interest on tokenized bonds can be accrued on a second and automatically transferred to the holder's wallet via smart contracts; bond shares can be fragmented and combined with stablecoins to form liquidity pools, providing the market with short-term cash management tools; holding bond tokens as collateral also makes it possible to instantly borrow stablecoins for working capital. These operations, which are difficult or inefficient to implement in traditional financial markets, will become perfectly feasible on compliant digital infrastructure. Hong Kong is simultaneously laying these two pipelines, awaiting the innovative energy that will erupt when they converge.
III. The Profound Significance of the "Regulatory Sandbox": More Than Just a Firewall, It's a Testing Ground for Innovation
In Hong Kong's digital asset strategy, the "regulatory sandbox" is a frequently mentioned but profoundly meaningful mechanism. It is far more than just a "firewall" to isolate risks from the mainstream market; its deeper strategic intention is to act as a proactive "innovation incubator" and "policy regulator."
The core function of a sandbox is to provide a realistic testing environment for fintech innovations that are ambiguous or unregulated under existing regulatory frameworks. Companies can collaborate closely with regulators within a limited scope and with a small number of real users to explore the risks and compliance boundaries of their business models. This sandbox is particularly significant for the Real-Time Asset Wafer (RWA) field. RWA projects often span multiple traditional legal domains, such as securities law, property law, and contract law, and combining them with blockchain technology generates numerous unprecedented new questions. For example: Do tokenized real estate shares legally represent ownership or income rights? Does the automatic execution of collateral liquidation by smart contracts cross the boundaries of financial licenses? Which laws apply to cross-border holding of tokenized assets?
Hong Kong's regulatory sandbox is designed to address these uncharted territories. Instead of developing a flawless set of rules that could stifle innovation beforehand, regulators can dynamically understand technology, assess risks, and accumulate regulatory experience through specific cases within the sandbox. For example, the sandbox can test how to combine bond interest payments with on-chain identity information to automate tax reporting and withholding; it can explore using IoT sensor data to trigger claims conditions for insurance tokens; and it can experiment with establishing a compliance access layer for tokenized assets, consisting of decentralized identity (DID) and verifiable credentials (VC). The results of these experiments will ultimately influence and shape formal regulatory rules in Hong Kong and internationally.
Paul Chan, at Davos, emphasized the launch of a regulatory sandbox to encourage application innovation, recognizing the flexibility and forward-looking nature of this "learning by doing, starting with specific examples and expanding to broader applications" approach. This gives Hong Kong's regulatory philosophy a unique "agility": it maintains both the "stability" of upholding bottom lines (such as investor protection and financial stability) and the "progress" of encouraging exploration and tolerating trial and error. This environment is extremely attractive to RWA entrepreneurs and financial institutions eager to break through existing paradigms while adhering to compliance.
IV. Global Impact of the Hong Kong Solution: Opportunities and Challenges
The impact of Hong Kong's series of initiatives will not be limited to the local area. It is providing a highly valuable model for RWA development globally, particularly in the Asia-Pacific region, characterized by "clear regulation, technological neutrality, and government guidance." This model is likely to trigger a significant "port effect"—attracting global asset issuers, investors, technology service providers, and professionals to Hong Kong, making it a global hub for the RWA ecosystem.
For asset issuers in Europe and the United States (such as large corporations and asset management companies), Hong Kong offers a new financing channel that aligns with international standards (such as following the OECD's Crypto Asset Reporting Framework CARF) while maintaining a clear open attitude towards digital assets. For projects in emerging markets such as Southeast Asia and the Middle East, Hong Kong serves as an ideal gateway to global capital. For technology developers and professional service institutions such as lawyers and accountants, this represents a huge increase in market demand. Xiao Yi, co-founder of Animoca Brands, pointed out that the future development of Web3 will be driven by infrastructure, regulation, and real users, and Hong Kong is poised to become a key global hub.
However, while looking optimistically, we must also soberly consider the challenges and unfinished road ahead for the Hong Kong approach. First, there is the hurdle of cross-border coordination regarding legal recognition. Hong Kong law's recognition of the validity of tokenized bonds does not imply equal recognition in other jurisdictions. For asset tokenization to achieve true global circulation, broad consensus among countries is needed on issues such as the legal recognition of property rights and the legal validity of smart contracts—undoubtedly a lengthy process.
Secondly, there is the perpetual balance between innovation and compliance. Even within Hong Kong, striking the right regulatory balance is fraught with debate. For example, the Hong Kong Securities and Futures Professionals Association publicly opposed the regulator's proposed removal of the "exemption threshold" for traditional asset management institutions investing in virtual assets, arguing that this would impose disproportionate compliance costs and discourage traditional institutions from exploring new avenues. Finding the optimal balance between protecting investors and not unduly stifling innovation tests the wisdom of regulators.
Third, there are technological risks and new forms of financial security. Blockchain technology itself is still evolving, and risks exist in areas such as smart contract vulnerabilities, private key management, and cross-chain communication. At the same time, tokenized assets may bring new forms of market manipulation, insider trading, and systemic risks; whether existing regulatory tools are fully effective remains to be seen.
Finally, there is fierce international competition. Singapore, the UAE, the UK, and other regions are also actively developing their digital assets and RWA sectors, each with its own regulatory framework and incentive policies. Whether Hong Kong can maintain its institutional advantages, market dynamism, and talent attraction will be a dynamic and long-term competition.
Conclusion
Paul Chan's declaration in Davos was less a news item about licenses and bonds and more a declaration about the infrastructure of the future of finance. What Hong Kong is doing is stepping outside the noise of cryptocurrency trading and focusing on building the foundation, constructing bridges, and setting up signposts for the core of the next phase of digital finance—the digital migration of real-world assets.
In the short term, the construction of this "official road" may increase the compliance costs for market participants, but in the long term, it paves the way for large-scale, low-risk entry of traditional trillion-dollar capital. When compliant trading venues, trustworthy stablecoin payment tools, and authoritative benchmark assets are all in place, RWA's development will shift from scattered "proof-of-concept" to large-scale "implementation" like a coordinated operation.
For every participant in the market, Hong Kong's story sends a clear signal: the era of discussing "whether or not" RWA is over; the key question has shifted to "how to make good use of this increasingly sophisticated infrastructure." Hong Kong's "prudent" yet "proactive" approach is precisely an attempt to provide certainty amidst uncertainty. The piers of this "Golden Gate Bridge" connecting the traditional and digital worlds have emerged; the next question is, who will be the first to cross it, and what kind of splendor will they build on this new continent?
Some of the information comes from the following sources:
• Paul Chan: Hong Kong will issue stablecoin licenses in early 2026, adopting a proactive yet prudent approach to developing digital assets.
• Paul Chan: Hong Kong is actively and prudently developing digital assets; stablecoin licenses are expected to be issued later this year.
Author: Liang Yu; Editor: Zhao Yidan
