Hong Kong has introduced its Chief Executive’s 2024 Policy Address which not only mentioned a number of virtual assets but also measures towards strengthening its virtual asset models.
The official statement read, “The Government will continue to promote innovative financial services such as central bank digital currency, mobile payment, virtual banking, virtual insurance and virtual asset trading. The Treasury Bureau will issue a policy statement to elaborate on the policy stance and approach on the application of artificial intelligence in the financial market.”
The HK government will also take up other measures in this direction, one of which includes advancing cross-border payment solutions using CBDCs. The Hong Kong Monetary Authority (HKMA) is said to be actively testing and exploring additional technical solutions and scenarios for cross-border trade settlements via the “Multi-Central Bank Digital Currency Cross-Border Network” (mBridge), and increasing participation from public and private institutions.
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HK is also working towards enhancing the regulation of virtual asset transactions -The Treasury Bureau will complete its second round of consultations on over-the-counter virtual asset transactions and propose a licensing framework for virtual asset custody service providers.
The government will also take up measures to encourage the tokenization of real-world assets and expand the digital currency ecosystem. The HKMA is advancing the “Ensemble” financial market infrastructure project to explore tokenization of real-world assets and using digital currencies for interbank settlements. Additionally, the HKMA is allowing potential issuers to test their business models in the “Stablecoin Issuer Sandbox” and, alongside the Treasury Bureau, plans to submit legislation this year to regulate fiat stablecoin issuer.
Lastly, measures for promoting the digital securities market will be taken up. The HKMA will introduce the “Digital Bond Subsidy Scheme” to incentivize financial institutions and issuers to adopt tokenization technology in capital market transactions.
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