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Hong Kong's Digital Asset Development History
1.1 Prelude: Mainland's "Pause Button" and Global "Fast Forward" (2017-2022)
In 2017, mainland China implemented a comprehensive halt on the virtual asset market, pressing the "pause button" on digital asset development. In September of that year, seven ministries in China jointly issued a notice on preventing risks from token issuance and financing, completely halting initial coin offering (ICO) activities and shutting down all virtual currency trading platforms within the country, aiming to effectively clear market risks. Subsequently, the mainland further intensified its crackdown on "disguised trading" and "over-the-counter trading," and in September 2021, explicitly classified all virtual currency-related businesses (including trading, redemption, intermediaries, advertising, etc.) as illegal financial activities. This series of stringent regulatory measures effectively maintained the stability and risk controllability of the financial system.
However, this strict "blockade" inadvertently became a "catalyst" for the global crypto industry, triggering a wave of talent, capital, and projects "going overseas." A large number of Web3 entrepreneurs, technical teams, and funds that were originally active in the mainland began to seek compliant development space abroad, accelerating the sowing and expansion of Web3 concepts globally.
While the mainland implemented strict regulations, Hong Kong's role was more cautious and subtle; it served as both a "firewall" to prevent risk spillover and quietly became an "observation post" for observing global Web3 development. To encourage fintech innovation while protecting investor interests, the Hong Kong Monetary Authority (HKMA) launched the "Fintech Regulatory Sandbox" in September 2016. Subsequently, the Securities and Futures Commission (SFC) and the Insurance Authority (HKIA) also introduced their own sandboxes, which were upgraded to "Sandbox 2.0" in 2017 to achieve cross-sector coordination. In September of the same year, the SFC issued its first statement on ICOs, indicating that if tokens had "securities" attributes, they might be regulated under the Securities and Futures Ordinance, emphasizing the regulatory principle that "substance over form." Since then, the SFC has continued to monitor the operations of virtual asset fund managers and trading platforms, and in 2018, launched the fintech regulatory sandbox, allowing companies to test their fintech innovation projects, including those related to virtual assets, in a controlled environment.
On the application level, the Hong Kong government actively explored the practical applications of blockchain technology. For example, in 2020, it completed four blockchain pilot projects covering government service areas such as trademark transfer, environmental impact assessment, pharmaceutical traceability, and company document archiving, to explore the feasibility and benefits of blockchain technology applications. In June 2022, the government further launched a "Shared Blockchain Platform" and planned to develop more general services and reference program modules to assist various policy bureaus/departments in developing more blockchain applications.
In addition, Hong Kong is also actively exploring central bank digital currency (CBDC) and the tokenization of real-world assets (RWA). In June 2021, the HKMA launched research on the "Digital Hong Kong Dollar" project, and in January 2022, released a discussion paper on "Cryptographic Assets and Stablecoins," proposing a regulatory framework for stablecoins. The HKMA collaborated with the Bank for International Settlements Innovation Hub's Hong Kong Centre to complete the "Project Genesis" project in 2021, aimed at testing the issuance of tokenized green bonds in Hong Kong. In 2022, the Hong Kong government also personally participated in the NFT issuance pilot program during Hong Kong Fintech Week, aiming to test the technological benefits brought by virtual assets.
During this period, it is hard not to think about why Hong Kong, standing firmly with the Chinese people on the financial and economic front, quietly prepared and researched the regulatory framework for virtual assets while the mainland imposed strict regulations. Although it started relatively slowly in terms of policy, its deep foundation as an international financial center, strong traditional financial industry base, and professional financial service capabilities laid the groundwork for a more proactive layout in the future.
1.2 Key Moves in the Game: Hong Kong's "Placement" and Strategic Intent (2023-2025)
From the end of 2022 to 2023, Hong Kong's digital asset regulatory policy welcomed a landmark shift, seen as a key "move" in Hong Kong's strategy in the global digital economy chess game. On October 31, 2022, the Hong Kong SAR government released the "Policy Declaration on the Development of Virtual Assets in Hong Kong," for the first time clearly stating that it would "actively promote" the development of the virtual asset ecosystem, marking a shift in regulatory thinking from "risk-oriented" to "opportunity-oriented." Shortly thereafter, on December 7, 2022, the "Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022" was passed by the Hong Kong Legislative Council, officially establishing a mandatory licensing system for virtual asset service providers (VASP). This system took effect on June 1, 2023, allowing licensed virtual asset trading platforms (VATP) to provide services to retail investors under strict investor protection measures. Subsequently, Hong Kong further approved virtual asset spot ETFs, making it the largest virtual asset ETF market in the Asia-Pacific region. By June 2025, the SFC had officially licensed 10 VATPs, with another 11 institutions in the application process. Additionally, the Hong Kong SAR government designated the "Stablecoin Ordinance" to officially take effect on August 1, 2025, further improving the regulatory framework for digital assets.
Choosing this time to "open the door," I interpret it as a high-level strategic choice at the national level. After the global crypto market experienced a round of wild growth and risk exposure (such as the FTX and LUNA incidents), the market's demand for compliance, transparency, and trust became unprecedentedly strong. At this moment, with Hong Kong as a "fortress," representing China to enter the market in a "compliant" and "controllable" manner, consolidating global digital asset resources and competing for the next generation of fintech discourse power is undoubtedly the best timing. Hong Kong's unique "one country, two systems" framework allows it to balance the mission of an international financial center with considerations for mainland financial security. HKMA Chief Executive Eddie Yue pointed out that the ordinance establishes a "risk-based, pragmatic, and flexible regulatory environment," providing healthy, responsible, and sustainable development conditions for Hong Kong's stablecoins and broader digital asset ecosystem. Its goal is to significantly enhance the attractiveness to global Web3 talent, capital, and projects through a sound regulatory framework and ecosystem, empowering the real economy and providing new momentum for economic development. This will transform Hong Kong from a traditional international financial center into a global leading digital asset innovation center and consolidate its strategic position as a bridgehead for the internationalization of the renminbi and a "super connector." Hong Kong's Financial Secretary Paul Chan emphasized that Hong Kong's attitude towards Web3.0 is not just regulatory but aims to achieve a balance that ensures market integrity while not stifling innovation.
Hong Kong's "first-mover" policy has also received positive responses and interactions from mainland cities, indicating a potential model of "Hong Kong pilot, mainland linkage." For example, Ant Group has listed Hong Kong as its overseas headquarters and successfully passed regulatory sandbox testing. Its RWA (real-world asset) tokenization practices have been validated, such as the first domestic RWA project based on new energy physical assets completed in cooperation with Longxin Group and Ant Group, as well as the RWA project based on photovoltaic physical assets completed by GCL-Poly Energy and Ant Group, all of which were announced through the HKMA's Ensemble project sandbox. These cases demonstrate that Hong Kong's regulatory clarity and international openness are providing important channels for mainland enterprises to participate in the global digital asset market under compliance. A report released by the Bank of China Shenzhen Branch's Greater Bay Area Financial Research Institute and the Bank of China Hong Kong Financial Research Institute suggests summarizing Hong Kong's stablecoin pilot experience to strengthen research on offshore renminbi-linked stablecoins. Furthermore, the Hong Kong SAR government itself has played a guiding role, such as issuing NFTs in 2022, subsequently becoming the first region in the country to issue tokenized government green bonds in 2023, and issuing a second batch of tokenized government green bonds in 2024. This strategic synergy not only promotes the development of Hong Kong's digital asset ecosystem but also builds a new bridge for connecting the mainland with international capital markets.
Long Chart: Major Events in Hong Kong from 2015 to August 2025
Hong Kong's Digital Asset "Twin Peaks" Regulatory Framework
Hong Kong's digital asset regulatory system is characterized by its "Twin Peaks" model, where the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) collaborate to create a regulatory environment that encourages financial innovation while strictly adhering to risk limits. The essence of this model lies in the clear division of responsibilities: the SFC focuses on the "investment" attributes of virtual assets, while the HKMA concentrates on their "payment" functions. The table below systematically clarifies the functions, legal basis, jurisdiction, and regulatory tone of the two regulatory agencies, providing a clear guide for understanding Hong Kong's regulatory blueprint.
The SFC and HKMA have formed a complementary regulatory pattern through clear functional division and close cooperation (such as signing memorandums of understanding). As the guardian of the securities market, the SFC extends mature investor protection principles to the virtual asset investment field; while the HKMA, as the central body of the financial system, ensures that the innovation of payment tokens does not undermine Hong Kong's monetary foundation. This dual-peak structure, with clear responsibilities, collectively constitutes a solid institutional guarantee for Hong Kong to develop into a global leading virtual asset center.
Core Analysis of VASP Licensing and Stablecoin Issuance Regulation
The core of Hong Kong's virtual asset regulatory framework consists of two pillars: the virtual asset service provider (VASP) licensing system and stablecoin issuance regulation. This section will delve into the key points and regulatory logic of these two frameworks.
3.1 VASP Licensing System: Defining Red Lines for Trading Platforms
Effective from June 1, 2023, the VASP licensing system is central to Hong Kong's regulation of virtual asset trading. This system requires that all centralized virtual asset trading platforms (VATP) operating in Hong Kong or targeting Hong Kong investors must be licensed, regardless of whether they trade security tokens. This measure aims to bring all relevant platforms under a unified and strict regulatory framework.
- Investor Protection: Informed, Aware of Risks, and Able to Bear
To protect retail investors, regulatory agencies have set multiple thresholds. Before opening accounts for retail clients, platforms must assess their knowledge level regarding virtual assets and provide adequate risk disclosures. When recommending trades, platforms must ensure that the advice aligns with the client's personal circumstances. The underlying logic is clear: to ensure that investors are "informed, aware of risks, and able to bear" before entering the market, avoiding unnecessary losses due to information asymmetry. Additionally, the SFC retains the authority to set investment limits on high-risk virtual assets, adding another layer of protection for retail investors' funds.
- Client Asset Security and Financial Stability
In light of the lessons learned from the collapse of platforms like FTX due to the misuse of client funds, Hong Kong has established globally top-tier strict standards for client asset security.
Asset "Hard Isolation": The core requirement is that platforms must entrust clients' virtual assets to independent third-party custodians (usually licensed trust companies in Hong Kong) and adhere to industry best practices of 98% cold storage and 2% hot storage, aiming to minimize the possibility of asset misappropriation by the platform. Clients' fiat currency must also be stored in independent trust or designated accounts.
Financial High Threshold: Platforms must not only have a paid-up capital of no less than HKD 5 million and liquid assets of HKD 3 million but also reserve enough liquidity assets to cover at least 12 months of operating expenses. This ensures that platforms have the ability to withstand market risks and continue operations, avoiding damage to investors' interests due to their own financial issues. Additionally, platforms must purchase insurance for client assets that is recognized by the SFC.
- Anti-Money Laundering/Counter-Terrorist Financing (AML/CFT)
The anonymity and cross-border characteristics of virtual assets make them susceptible to becoming a breeding ground for illegal activities. Therefore, the VASP licensing requirements mandate that platforms must strictly implement AML/CFT measures such as "Know Your Customer" (KYC) and Customer Due Diligence (CDD). This includes continuous monitoring of transactions, reporting suspicious activities, and encouraging the use of blockchain analysis tools to enhance tracking capabilities. These regulations aim to increase transaction transparency, combat financial crime, and maintain Hong Kong's reputation as an international financial center and the integrity of its financial system.
- Token Listing and Trading Scope
To control risks from the source, platforms must establish an independent token review committee. This committee is responsible for conducting rigorous due diligence on all tokens planned for listing, assessing their legality, security, team background, and technical foundation. Regulations clearly state that only high-liquidity tokens that are non-security in nature and included in mainstream indices can be opened to retail investors. This prudent screening mechanism aims to protect investors (especially retail investors) from inferior or fraudulent projects, ensuring fairness and transparency in the market.
- Prohibited Business Activities
To ensure the neutrality of the platform, VATPs are prohibited from engaging in proprietary trading for their own accounts, with the core aim of preventing conflicts of interest between the platform and its clients. Additionally, current guidelines still prohibit platforms from issuing or trading virtual asset futures and related derivatives. This reflects the regulatory authorities' cautious attitude towards complex high-risk products, prioritizing market stability. The SFC has stated that it will review the situation in the future and consider the possibility of opening such products to institutional investors.
3.2 Stablecoin Regulatory Framework: Establishing Rules for "Quasi-Money"
Stablecoin regulation is a key step for Hong Kong in building a global virtual asset center, led by the Hong Kong Monetary Authority (HKMA). The relevant bill was passed on May 21, 2025, and will officially take effect on August 1 of the same year.
- Focus on Fiat-Collateralized Stablecoins
The core objective of the regulatory framework is to regulate "designated stablecoins" that are pegged to one or more fiat currencies, as these assets possess payment potential, and their stability is directly related to financial security. Based on the lessons learned from the collapse of Terra/LUNA, algorithmic stablecoins lacking backing by real assets are explicitly excluded from regulation. Notably, this regulation has extraterritorial effect: regardless of where the issuer is located, as long as the issued Hong Kong dollar stablecoin touches Hong Kong users, it must comply with Hong Kong's licensing regulations.
- Ensuring the "Stability" is Genuine
To issue stablecoins in Hong Kong, issuers must obtain a license from the HKMA. The core requirements revolve around "stability" and "trustworthiness":
1:1 Full Reserve: Must provide 100% reserve support with high-quality liquid assets.
Transparency and Trust: Reserves must undergo regular third-party audits and be disclosed to the public.
Robust Operations: Must establish a reliable redemption mechanism, strict AML/CFT measures, and plans to ensure cybersecurity and business continuity.
These high-threshold requirements aim to ensure that stablecoins can be redeemed at any time, preventing "de-pegging" risks and thereby building market confidence.
- Cautious Start, Encouraging Innovation
In the initial phase of licensing, the HKMA will adopt a very cautious approach, expecting to issue only a small number of licenses, and requiring applicants to demonstrate that their stablecoins have clear and genuine application scenarios.
Hong Kong has established a "sandbox" mechanism allowing interested institutions to test their business models and risk control capabilities in a controlled environment. This "cautious licensing + sandbox trial" strategy aims to ensure that the first batch of licensed institutions serves as benchmarks while providing valuable practical experience for regulation and the market, ultimately promoting the compliant application of stablecoins in payments, cross-border remittances, and other fields, consolidating Hong Kong's position in financial innovation. In the following chapter, we will continue to analyze how this mechanism operates.
From the Applicant's Perspective: A Comprehensive Overview of the Regulatory Sandbox Process
Hong Kong's core strategy in the field of virtual asset regulation is its carefully designed "regulatory sandbox" mechanism, which is not only a regulatory tool but also a strategic platform for promoting the development of the fintech ecosystem, aiming to seek a balance between embracing fintech innovation and maintaining financial stability and protecting investors. Hong Kong's "regulatory sandbox" is essentially a "dialogue mechanism between regulation and innovation" and a "testing ground for risk isolation."
This process is not a simple licensing application but a long, rigorous, and deeply interactive journey of "co-evolution." It places high demands on applicants' capital, technology, compliance capabilities, and risk management levels.
To visualize this complex, multi-stage approval process, I have constructed the following "regulatory sandbox comprehensive process chart." This chart uses time as an axis, detailing each key step, interaction mode, and deliverable from the initial concept to the final licensing, aiming to provide potential applicants with a clear roadmap for action.
As seen in the above chart, the design of the entire process reflects the rigor, interactivity, and transparency of Hong Kong's regulatory authorities.
Preparation is Key (Application Stage): The focus at this stage is on internal "fine-tuning." The HKMA expects applicants to have completed a highly mature business model design, technical system construction, and compliance framework setup before formally submitting their applications. This effectively front-loads most of the preparatory work, ensuring that only well-prepared, high-quality participants enter the sandbox.
Deep Interaction (Testing Stage): The sandbox is far from a passive observation period; it is a "laboratory" where regulation and innovation collide and evolve together. By appointing "case officers," establishing "chatroom" mechanisms, and requiring continuous data sharing and reporting, the HKMA gains deep insights into the actual operational risks of innovative businesses, while companies can timely adjust and optimize their plans under regulatory guidance, reducing the risk of non-compliance.
High Standards for Graduation (Evaluation Stage): The "graduation" threshold is extremely high, with evaluation criteria targeting the core of financial stability—reserves, redemption mechanisms, risk control systems, and technical security. The design from "Principle Approval (AIP)" to "Formal License" sets the final insurance for market access, ensuring that all promised capital and systems are fully in place.
This rigorous process is not merely a regulatory hurdle; it also builds an ecosystem of mutual benefit between regulatory authorities and innovative enterprises. The actual effects produced are twofold, specifically reflected in the following two aspects:
In summary, Hong Kong's regulatory sandbox mechanism, particularly the path design for stablecoin issuers, is the most strategically visionary component of its digital asset regulatory framework. It transcends the traditional one-dimensional model of approval, creatively integrating the seemingly opposing concepts of "strict regulation" and "cutting-edge innovation."
Through this carefully designed process, Hong Kong not only sets globally leading compliance standards for the market but also establishes a dynamic, self-optimizing regulatory and industry interaction ecosystem. This not only safeguards its own financial stability but also announces to the world: Hong Kong has the capability and wisdom to navigate the future of digital finance and is committed to becoming the safest, most regulated, and most vibrant hub in the global virtual asset field. This "dual empowerment" sandbox is the cornerstone of Hong Kong's construction of its global digital financial leadership. In the fifth part of the article, we will delve into the sandbox to analyze this dynamic interaction process.
Regulatory Sandbox—A Typical Case on the Path to Compliance
This chapter reveals the core considerations from a regulatory perspective by analyzing practical cases of the regulatory sandbox in Hong Kong's digital asset field, attempting to grasp Hong Kong's "development pulse" in embracing the web3 innovation process.
5.1 Stablecoin Regulatory Sandbox: Pragmatic First, Addressing Pain Points
In July 2023, the HKMA conducted consultations on legislative proposals for implementing a regulatory system for stablecoin issuers and announced the launch of a sandbox arrangement. In July 2024, the HKMA announced the first batch of participants entering the sandbox, including JD Coin Chain Technology (Hong Kong), Yuan Coin Technology, and a consortium formed by Standard Chartered Bank (Hong Kong), Anhe Group, and Hong Kong Telecommunications. All three of the first batch plan to issue stablecoins pegged to the Hong Kong dollar.
JD Coin Chain Technology (Hong Kong): According to CEO Liu Peng, its stablecoin project (JD-HKD) mainly focuses on three practical use cases: cross-border payments, investment trading, and retail payments. It aims to expand cross-border payment scenario users through direct customer acquisition and non-direct customer acquisition (such as cooperation with compliant wholesalers) and to collaborate with global compliant exchanges to expand investment trading clients. In retail payments, it will first be implemented on JD Global Purchase's Hong Kong and Macau site, allowing users to use stablecoin payments for bills in JD's e-commerce business in the Hong Kong and Macau regions. In specific strategies, JD will tailor stablecoin payment solutions for different industries while leveraging JD's international logistics scenarios to put data such as orders from small and medium-sized enterprises going overseas on the blockchain, improving payment and financing efficiency for enterprises. Reports indicate that JD's JD Coin Chain has registered "JCOIN" and "JOYCOIN," and the market generally believes these two names will be used for its stablecoin.
Yuan Coin Technology: Founded by former HKMA President Norman Chan, Yuan Coin Technology is set to launch the HKDR stablecoin, primarily targeting three business scenarios: cross-border trade, virtual asset trading, and RWA. Leveraging its parent company's obtained Stored Value Facility (SVF) license and the foundational and channel advantages accumulated by shareholders and partners such as HashKey Exchange, Cobo digital asset custodian, and Lianlian Pay in the web3, custody, payment, and trading fields, Yuan Coin Technology is expected to layout the full chain of web3 ecosystem payments, achieving seamless connectivity between web2 and web3.
Standard Chartered Bank, Anhe Group, and Hong Kong Telecommunications Consortium: Anhe Group, as a practitioner in the native web3 field, is responsible for developing native web3 application scenarios, while Standard Chartered Bank, as the issuer of the Hong Kong dollar, drives bank customer resources, and Hong Kong Telecommunications has the electronic payment program Tap&Go, focusing on retail customer reach. The three parties achieve maximum promotion, large-scale circulation, and application of stablecoins through joint application, covering traditional bank customers, traditional payment customers, and web3 users. Application scenarios include virtual asset trading in web3 games, cross-border trade, and financial settlement in traditional finance.
It is worth noting that on July 23, HKMA Chief Executive Eddie Yue reiterated that to date, dozens of institutions interested in applying for stablecoin licenses have contacted them, many of which lack real application scenarios, concrete feasible plans, and implementation strategies, let alone awareness and capability for risk management. Some institutions that can provide application scenarios, however, lack the technology and experience to issue stablecoins and manage financial risks. It is suggested that they do not need to become issuers but rather collaborate with issuers to provide application scenarios. Overall, the HKMA will only approve a few stablecoin licenses, which may disappoint many applicants.
I believe that from the current stablecoin issuers entering the sandbox, the HKMA's considerations for stablecoin issuers include the following three points: First, to focus on whether the issuer has real application scenarios, especially in the fields of cross-border trade, e-commerce, and finance, and whether they can leverage the technological advantages of stablecoins to improve payment efficiency and other financial conveniences in transactions. Second, whether they possess awareness and capability for financial risk management, ensuring the establishment of appropriate investor protection measures. Third, to control the overall number of licenses issued, avoiding financial risks and waste of competitive resources due to the lack of the necessary prerequisites mentioned in the first two points.
5.2 Ensemble Sandbox: Innovating Financial Market Infrastructure, Promoting Tokenization Applications
In March 2024, the Hong Kong Monetary Authority (HKMA) announced the launch of the Ensemble project to promote interbank tokenized deposit settlement using wholesale Central Bank Digital Currency (wCBDC) and to facilitate tokenized asset trading using tokenized currencies. In May of the same year, a working group for the Ensemble project was established to collaboratively develop standards and proposals with the industry to enhance the interoperability between wCBDC, tokenized currencies, and tokenized assets. In August, the HKMA announced the first phase progress of the Ensemble project and introduced four major tokenization use cases, including fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain financing.
The Chief Executive Officer of the Hong Kong Securities and Futures Commission, Ashley Alder, stated that the "Ensemble" project is a key infrastructure-building initiative that will drive the scaling of the tokenized ecosystem in its new phase, serving as the core of Hong Kong's innovative financial infrastructure. Tokenizing central bank money and bank deposits at the wholesale level will inject strong momentum into the overall tokenization project. Tokenized currencies and deposits are prerequisites for fully unleashing the potential of tokenization.
Over the past year, the Ensemble project has announced numerous use cases, and this chapter will highlight key examples.
- Green and Sustainable Finance
Ant Group is an important participant in the fields of green and sustainable finance, as well as trade and supply chain finance, and has implemented multiple use cases. In addition to the three use cases in collaboration with Ant Group, the "Chong Meihao" electric vehicle charging station tokenization case by China Resources Land was also selected for the Hong Kong Ensemble project, with a business model similar to that of Longxin Technology. This section will focus on the three use cases in collaboration with Ant Group.
Charging Pile Industry RWA (in collaboration with Longxin Technology): Longxin Technology is a leading energy technology company in China, having developed various energy digital products and new energy internet platforms. For example, it has a life payment platform in cooperation with Alipay and other portals, providing online services for over 450 million utility users for water, electricity, and heating payments; the Xinyao Photovoltaic Cloud Platform connects various power stations through distributed photovoltaic platform operations, aggregating green electricity transactions; its new energy aggregation charging platform, Xindian Tu, builds an "AI smart hub" linking the demand for new energy vehicles with over 2 million charging devices. Thus, Longxin is not a traditional new energy company transforming through digital technology but a provider of industrial digital technology solutions with digital technology as its core competitiveness, focusing on technology and services for business information systems in the utility sector.
The first RWA in the charging pile industry raised 100 million RMB. Longxin Group used some charging piles operated on the Xindian Tu platform as supporting assets, issuing "charging pile" digital assets on the blockchain based on credible data, with each digital asset representing a portion of the revenue rights of the corresponding charging pile. Among them, the Ant Chain inside product module provides data on-chain technology support. Local and small to medium-sized charging stations connected to Xindian Tu face similar financing challenges as small and medium-sized enterprises, such as low credit ratings and difficulties in bank financing, but they also have advantages in familiar local resources, market expansion, and flexible operating models. By putting operational data on-chain, this project is expected to provide construction and operational support for thousands of small and medium-sized energy companies, such as energy storage and charging operators, helping them activate quality existing assets.
Photovoltaic Industry RWA (in collaboration with GCL-Poly Energy): Ant Group further partnered with GCL-Poly Energy to successfully complete RWA based on photovoltaic physical assets, involving over 200 million RMB. GCL-Poly Energy's "Xinyangguang" brand, based on household photovoltaic business, has developed a complete business system that includes product research and development, market sales, engineering construction, and operational maintenance for household photovoltaic systems. GCL-Poly Energy used approximately 82 MW of "Xinyangguang" household photovoltaic systems located in Hubei and Hunan provinces as RWA supporting assets, packaging and storing the value, operation, revenue, and other data of household photovoltaic projects on the blockchain through the combination of blockchain technology and IoT technology, forming digital tokens.
Two-Wheel Battery Swap Business RWA (in collaboration with Xunying Group): Approximately 4,000 battery swap cabinets and 16,000 lithium batteries operated by Anhui Xunying New Energy Group were designated as assets for issuance to the private placement market, raising 20 million RMB. By combining IoT and blockchain technology, the value, operation, revenue, and other data of the battery swap project are stored on the blockchain, forming digital tokens to activate existing assets, accelerate capital recovery, and enhance the liquidity and tradability of battery swap assets.
From the three new energy RWA cases in collaboration with Ant Group, some commonalities can be observed:
First, compared to operational assets like agricultural products, real estate, and restaurant operations that require human intervention, the assets in the new energy charging and swapping industry have the inherent advantage of being connected to power and networks, allowing them to operate autonomously and upload data without personnel intervention, eliminating scenarios where "hiring a cleaner for 100,000 a month to wipe the equipment" as operational costs could harm investor rights.
Second, compared to direct financing where large companies serve as the financing entity and indirect financing where they serve as the credit entity, RWA financing provides a new solution for financing small and medium-sized enterprises (or a collective of small and medium-sized enterprises or operators) by using project forms (the above cases all involve the revenue rights of large-scale (over a million) small and medium-sized new energy operational terminal devices), supporting the development of the domestic new energy industry with overseas funds.
Third, Ant Group provides multiple technologies to safeguard investor rights. For example, IoT technology ensures real-time asset connectivity, allowing for immediate tracking of equipment operation dynamics, AI enhances operational efficiency, and asset data is put on-chain to ensure data authenticity and reliability, ultimately synchronizing detailed data such as charging device ID, charging device status, charging amount, charging fees, and charging time with multiple parties, making asset and revenue situations transparent and visible.
Based on the above cases, new ideas and inspirations for potential underlying assets of future RWA products are provided, with existing assets that possess four major characteristics—networked management, local operation, connection to power and networks, and direct revenue generation—having significant potential to become RWA-supported assets in the future. Examples include locally shared rental equipment (self-service rental children's cars and scooters in shopping malls), smart unmanned retail machines, revenue rights for rental equipment in the industrial sector, smart parking revenue rights, and edge computing node computing power service rental revenue rights, among others.
- Trade and Supply Chain Financing
International trade involves numerous international trade documents, with a transoceanic shipment potentially requiring 50 pages of documents and 30 related parties. The bill of lading, as an important property right certificate, carries the function of ensuring the delivery of goods to the final consignee on the bill. However, the current bill of lading still mainly relies on traditional paper methods, with the usage rate of electronic bills of lading (eBL) below 4% in 2024. In 2018, COSCO Shipping initiated the establishment of a global shipping business network platform (GBSN), which was registered in Hong Kong in 2021, launching the first "paperless release" product in July of the same year. In June 2022, the first blockchain electronic bill of lading based on the GSBN platform—IQAX eBL—was approved by the International Group of P&I Clubs.
Electronic Bill of Lading (eBL): Ant Group assisted the HKMA in building a tokenized asset platform within the sandbox to facilitate the delivery versus payment (DvP) transaction between traditional assets and tokenized deposits, allowing electronic bills of lading (eBL) issued by the Global Shipping Business Network (GSBN) to be traded on the platform. HSBC, Hang Seng Bank, and Bank of China (Hong Kong) have facilitated the use of tokenized deposits to settle the transfer of electronic bills of lading. This solution significantly enhances the efficiency of trade processes, strengthens data and transaction security, and opens new avenues for addressing trade financing gaps.
- Fixed Income and Investment Funds
Fixed income and investment funds focus on the tokenization of bonds and funds. In the bond market, Hong Kong has explored the tokenization of green bonds through EvergreenHub:
In February 2023, the Hong Kong SAR government announced the successful issuance of 800 million HKD in tokenized green bonds under the green bond program, making it one of the first tokenized green bonds issued by a government globally. The primary issuance of this bond used a private blockchain network, settling securities tokens representing the actual rights of the bonds and cash tokens representing the HKD-denominated bonds issued by the HKMA using a T+1 DvP method. The settlement was provided by the HKMA's Central Moneymarkets Unit (CMU), with Goldman Sachs' tokenization platform GS DAPTM responsible for the delivery. Subsequent bond processes (including coupon payments, secondary market trading settlements, and redemption at maturity) will also be conducted digitally on the private blockchain network.
In February 2024, the Hong Kong SAR government announced the successful issuance of digital green bonds valued at approximately 6 billion HKD, denominated in HKD, RMB, USD, and EUR, under the Hong Kong Government Green Bond Program. The settlement and delivery system used for this batch of digital green bonds was the CMU and HSBC Orion digital asset platform, making it one of the first multi-currency digital bonds globally.
Traditional bond issuance or fund trading settlement procedures generally require 2-5 working days, while tokenized bonds and funds support timely payments and settlements 24/7, significantly shortening the required time, simplifying trading processes, eliminating settlement delays, and reducing associated risks.
In August 2024, at the launch ceremony of the Ensemble sandbox, HKMA Vice President Li Dazhi stated that the bond issuance being validated in the sandbox aims to verify the end-to-end transaction process, which is technically different from previous tokenized bonds. The development of tokenized finance is not an overnight process and requires validation across different technical levels. It can be inferred that the initial issuance tests focus on the issuance and settlement phases on the blockchain network and digital asset platform, while later phases will validate the circulation of bonds among a broader range of entities, thereby verifying the technology for 24/7 trading of tokenized green bonds.
- Liquidity Management
Liquidity management focuses on repurchase agreements and treasury management use cases, promoting banks to build corporate treasury management solutions based on tokenized deposits for clients. In May 2025, HSBC's tokenized deposit infrastructure was put into use, launching Hong Kong's first blockchain settlement service provided by a bank. Ant International was the first corporate client to adopt this solution, with its subsidiary's deposits in HSBC accounts being tokenized and then issuing instructions for tokenized deposit transfer transactions through its internal fund management platform, Whale, successfully completing instant internal fund allocation. By leveraging the programmable and instant settlement characteristics of tokenized deposits, the tokenized fund management solution is expected to enhance more transparent, efficient, and convenient corporate payment and fund management solutions.
Future Outlook
The digital asset regulatory framework established in Hong Kong, along with its pioneering sandbox use case practices, clearly presents a specific path for innovation to achieve robust development within a compliant framework. As stated in the "Hong Kong Digital Asset Development Policy Declaration 2.0," Hong Kong is continuously building a "trustworthy and innovation-focused digital asset ecosystem" and will continue to strengthen its leading position in the global digital asset field, promoting Hong Kong as a global innovation center.
With the official implementation of the "Stablecoin Ordinance" on August 1, it also provides a more solid institutional foundation and broad development space for Hong Kong to promote stablecoin application scenarios, expand the variety of tokenized products, and enhance the liquidity and popularity of stablecoins and tokenized financial products.
Looking ahead, leveraging the deep foundation of a traditional international financial center, the first-mover advantage of a systematic regulatory framework in the digital asset field, and its natural hub position connecting the mainland and global digital asset markets, Hong Kong is expected to leap to become a key node in the global digital asset landscape and a core hub for the tokenization of real-world assets, building an irreplicable unique competitive advantage.
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