Hong Kong issues policy statement on development of virtual assets

Hong Kong's government issued a policy statement on the development of virtual assets in the territory, saying it is open and inclusive towards the global community of innovators engaging in such businesses.

The government and financial regulators are working towards providing a facilitating environment for promoting sustainable and responsible development of the virtual assets sector.

The Securities and Futures Commission will conduct a public consultation on how retail investors may be given a suitable degree of access to virtual assets.

Hong Kong will be open to the possibility of having Exchange Traded Funds on virtual assets in its market.

The government said it is open to future review on property rights for tokenized assets and the legality of smart contracts, so as to facilitate their development in Hong Kong.

In due course, the Hong Kong Monetary Authority will announce consultation outcome and next steps on the regulatory regime for stablecoins.

The government and the regulators are looking into some pilot projects to test the technological benefits brought by virtual assets and their further applications in the financial markets.

These projects include non-fungible token (NFT) issuance for Hong Kong Fintech Week 2022, Green bond tokenization, and e-HKD.

"The policy statement explains in detail our vision and approach, regulatory regimes, thoughts on investors' exposures, and our pilot projects to embrace the technological benefits and financial innovations brought by [virtual assets]," said Financial Secretary Paul Chan. "Our policy stance on [virtual assets] is now clearly communicated to the global markets."