Officials Announce Hong Kong Intention to Regulate Tokenization

Published: November 02, 2023 at 12:36 am Updated: November 02, 2023 at 12:36 am

Officials Announce Hong Kong Intention to Regulate Tokenization with New Rules

Financial officials announced Hong Kong’s forthcoming regulatory measures concerning tokenization, emphasizing customer protection in recent updates from Hong Kong Fintech Week.

Christopher Hui, the Financial Services and Treasury Secretary, highlighted the government’s undeterred commitment to promoting web3 innovation. Despite the crackdowns on JPEX crypto exchange, the government remains focused on nurturing the web3 market.

According to Hui, new regulatory announcements are on the horizon from the Securities and Futures Commission, targeting intermediaries involved in tokenized securities and authorized investment products’ tokenization.

Hui also mentioned the ongoing discussions around expanding regulatory purview to encompass broader virtual asset transactions, not merely those occurring on trading platforms. The Hong Kong Monetary Authority and the Financial Services and Treasury Bureau will soon release a joint consultation on a regulatory framework for stablecoin issuers.

Eddie Yue, HKMA’s CEO, acknowledged the growing adoption of tokenization in various use cases, citing the example of the world’s inaugural tokenized government green bond issued by Hong Kong. The government’s dialogue with industry players is geared towards pioneering further tokenized issuances. Yue anticipates an uptrend in tokenization and foresees an expansion in blockchain-based payment methods, encompassing services like stablecoin wallets and tokenized banking deposits.

Julia Leung, the SFC’s CEO, also touched upon the impending release of two regulatory circulars. These circulars will address the perceived risks associated with emerging technologies and outline the regulator’s expectations for intermediaries.

Leung emphasized the importance of transferring assets safely and maintaining proper ownership records. She stated that although they encourage the industry to experiment, they must stay aware of the inherent risks, particularly in token ownership and recordkeeping.

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master’s degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

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