Author: Fintax

1. Summary of Content

On June 26, 2025, the Hong Kong government released the "Digital Asset Development Policy Declaration 2.0" (referred to as "Declaration 2.0"), marking a strategic upgrade in Hong Kong's digital asset sector to further consolidate its competitiveness as a global digital finance hub. The new declaration continues to support innovation and balanced regulation while focusing on enhancing the liquidity of digital asset trading and promoting a more diversified supply of digital asset products to strengthen Hong Kong's position as a global digital asset center.

The "Declaration 2.0" is framed around "LEAP," which corresponds to optimizing legal and regulatory frameworks, expanding the variety of tokenized products, advancing use cases and cross-sectoral collaboration, and developing talent and partnerships. The aim is to create an innovative, vibrant, sustainable digital asset ecosystem that is deeply integrated into the real economy, reinforcing Hong Kong's leading position in the global financial landscape.

2. Key Interpretations

2.1 Review of the First Policy Declaration

On October 31, 2022, the Hong Kong Special Administrative Region government released the "Policy Declaration on the Development of Virtual Assets in Hong Kong," clarifying that the government and regulatory bodies would establish a regulatory framework for virtual assets based on the principle of "same business, same risk, same rules." It also indicated plans to promote the establishment of a licensing system for virtual asset service providers and a regulatory framework for stablecoins used for payment purposes. The government expressed an open attitude towards future discussions on the ownership of tokenized assets and the legality of smart contracts, and it would launch experimental programs to allow the government to issue tokenized green bonds for institutional investors to subscribe.

2.2 Overview of Existing Regulatory and Tax Policies

Previously, Hong Kong had not established a dedicated regulatory framework specifically for digital assets. Since 2017, the Hong Kong Securities and Futures Commission (SFC) has uniformly regulated "security-type" tokens, including licensing requirements for trading platforms, "virtual asset" portfolio managers, and funds, aiming to ensure compliance with existing Securities and Futures Ordinance (SFO) regulations. For over-the-counter (OTC) transactions, a Money Service Operator (MSO) license from Hong Kong Customs is required. The "Stablecoin Ordinance" was officially passed on May 21, 2025, establishing the first regulatory framework for stablecoins.

Taxation of digital assets primarily falls under the Hong Kong Inland Revenue Department's 2020 updated "Departmental Interpretation and Practice Notes" (DIPN) No. 39, which includes provisions on how digital assets are taxed. DIPN 39 categorizes digital tokens into payment tokens, security tokens, and utility tokens. According to DIPN 39 and general tax regulations in Hong Kong, the profits tax on digital tokens depends on their nature and use. The tax treatment of initial coin offering (ICO) proceeds typically follows the attributes of the issued tokens, meaning that the nature of the rights and obligations of the tokens determines the tax treatment, rather than the form of the token issuance. Additionally, profits generated from the sale of capital assets are not subject to profits tax. If digital assets are purchased for long-term investment purposes, profits from the disposal of these assets are also exempt from profits tax. However, profits derived from cryptocurrency business activities (including cryptocurrency trading, exchanges, mining, etc.) generated in Hong Kong are subject to profits tax. Employment income received in cryptocurrency is subject to salaries tax.

2.3 Interpretation of Declaration Highlights

Building on the first policy declaration, the Hong Kong government further introduced "Declaration 2.0," demonstrating its determination to seek a delicate balance between risk prevention and innovation encouragement, and to enhance its position in the digital asset sector. The series of measures under the LEAP framework is a core component of this "Declaration 2.0."

In terms of optimizing legal and regulatory frameworks, the Hong Kong government is constructing a unified and comprehensive regulatory framework covering digital asset trading platforms, stablecoin issuers, digital asset trading service providers, and digital asset custody service providers, with the core goal of protecting investors and consumers. The Hong Kong government has not established a dedicated regulatory department for digital assets but is attempting to integrate digital assets into Hong Kong's existing regulatory system, clarifying the responsibility chain and jurisdiction to avoid regulatory overlap. The government suggests designating the SFC as the primary regulatory body for digital asset trading service providers, responsible for licensing and registration, setting standards, optimizing regulatory processes, and reducing potential regulatory arbitrage under different digital asset regulatory frameworks. The Hong Kong Monetary Authority (HKMA) will act as the frontline regulatory body for banks, overseeing their digital asset trading activities. Similarly, the SFC will serve as the primary regulatory body for digital asset custody service providers, responsible for licensing and registration, as well as setting relevant standards, while the HKMA will supervise their digital asset custody activities. Additionally, the Financial Services and the Treasury Bureau (the specific agency responsible for the declaration, mainly overseeing Hong Kong's financial affairs and treasury, including policy formulation and legislative proposals related to the development of Hong Kong's financial markets, and the management of the government's assets, expenditures, and revenues) and the HKMA will lead the regulatory framework for tokenization laws, referencing international experiences and practices to promote further application of tokenization in Hong Kong.

In expanding the variety of tokenized products, the Hong Kong government will regularize the issuance of tokenized government bonds and explore different currency and maturity arrangements. To further leverage the advantages of tokenization, the Financial Services and the Treasury Bureau and the HKMA will continue to communicate with industry experts to understand various market perspectives, including incorporating digital currencies to enhance trading efficiency, secondary market trading applications, and further expanding investor participation in the local bond market.

Furthermore, the Hong Kong government will provide incentives for the tokenization of real-world assets and financial assets to enhance market efficiency, accessibility, and liquidity. Through the HKMA's Ensemble project (which aims to explore innovative financial market infrastructure based on blockchain platforms to facilitate seamless interbank settlement using tokenized central bank digital currency (wCBDC)), it encourages innovative application scenarios, including the tokenization of traditional financial products (such as money market funds and other funds) and the income streams of real-world assets. It will also explore establishing Ensemble infrastructure to facilitate the settlement of tokenized deposits between banks, simplifying processes and enhancing liquidity. To further develop the commodity trading ecosystem, the government encourages the market to apply tokenization and physical asset tracking technology in warehousing programs. To promote broader tokenization of assets and financial instruments, it will also expand the application of tokenization solutions in industries such as precious metals (like gold), non-ferrous metals, and renewable energy (like solar panels). Relatedly, in February 2025, the SFC released the "ASPIRe" roadmap, which outlines 12 key measures around five core pillars: Access, Safeguards, Products, Infrastructure, and Relationships, aiming to build a safer, more innovative, and open digital asset market. The core of this roadmap is to expand the products and services of digital asset trading platforms. Measures include considering the opening of digital asset staking, allowing professional investors to trade derivatives, and assessing the opening of margin lending to enhance market liquidity.

"Declaration 2.0" also releases positive signals at the tax system level. The document states that the Hong Kong government will clarify that all exchange-traded funds (ETFs) listed on the Hong Kong Stock Exchange, including tokenized ETFs, will be exempt from stamp duty upon transfer (the stamp duty for selling or purchasing Hong Kong securities is 0.1%). At the same time, the Hong Kong government will submit legislative proposals to include specified digital assets in private placements of funds and family investment control tools that qualify for profits tax exemptions (with a maximum tax rate of 16.5%). If the proposal is approved by the Legislative Council, the tax exemption will take effect from the 2025/2026 tax year. The reforms in the tax area demonstrate Hong Kong's strategic intent to create a digital asset-friendly tax system. These measures, in conjunction with legal and regulatory reforms, collectively form the institutional advantages for the development of digital assets in Hong Kong. By reducing institutional costs, Hong Kong is expected to attract more global capital inflows, further enhancing its influence in the digital asset financial sector.

In advancing application scenarios and cross-sectoral collaboration, the Hong Kong government has expressed support for stablecoins and other tokenization projects, including exploring the use of stablecoins as payment tools. Previously, Hong Kong officially released the "Stablecoin Ordinance," and the government will implement the regulatory system for stablecoin issuers starting August 1, 2025, setting requirements for reserve asset management, stability mechanisms, redemption processes, and risk management to ensure the stability and credibility of stablecoin issuance, enhancing its reliability for use locally and internationally. The standardization of stablecoins provides infrastructure support for the tokenization of financial assets, the application of smart contracts, and other innovations, as well as serving as a reference for the issuance and management of other real-world assets (RWAs), further broadening the application possibilities of stablecoins in the real economy. The licensing system will also have a transitional arrangement to allow the industry to apply for licenses and make appropriate business arrangements according to the regulations.

In terms of talent and partnership development, the Hong Kong government will collaborate with market participants and universities to promote talent development, establishing a sustainable talent pool in Hong Kong to support its goals in digital asset development. It will also position Hong Kong as a center for knowledge sharing and promote cooperation with other jurisdictions. Regulatory bodies will jointly support and participate in international cooperation, including establishing memoranda of understanding with relevant international organizations and regulatory bodies from other jurisdictions to achieve information sharing and regulatory cooperation in the digital asset field.

3. Future Outlook

Although the declaration itself does not have mandatory effect, it still indicates the continuation and strengthening of the Hong Kong government's crypto-friendly attitude. Overall, through a unified regulatory framework, legal and regulatory reviews, regularization of tokenized government bond issuance, expansion of tokenization of real-world assets and financial products, promotion of stablecoin application scenarios, strengthening cooperation in regulation, and advancing international collaboration, the Hong Kong government is laying the groundwork for further innovation and market development. Combined with a thriving ecosystem supported by training and project support, collaboration between universities and the industry, and digital asset infrastructure, it may create significant benefits for the real economy and financial markets.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。