Hong Kong recently unveiled its Chief Executive’s 2024 Policy Address, which outlined a series of initiatives aimed at bolstering the city’s virtual asset landscape. The address not only highlighted the importance of virtual assets but also detailed measures to strengthen the virtual asset models in Hong Kong.
According to the official statement, the government is committed to promoting 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 provide further insights into the application of artificial intelligence in the financial market.
One of the key initiatives outlined in the policy address is the advancement of cross-border payment solutions using central bank digital currencies (CBDCs). The Hong Kong Monetary Authority (HKMA) is actively exploring technical solutions for cross-border trade settlements through the “Multi-Central Bank Digital Currency Cross-Border Network” (mBridge) and is looking to increase participation from both public and private institutions.
In addition, the government is working towards enhancing the regulation of virtual asset transactions. The Treasury Bureau is set to complete its second round of consultations on over-the-counter virtual asset transactions and will propose a licensing framework for virtual asset custody service providers.
Moreover, Hong Kong is keen on encouraging the tokenization of real-world assets and expanding the digital currency ecosystem. The HKMA is spearheading the “Ensemble” financial market infrastructure project to explore the tokenization of real-world assets and the use of digital currencies for interbank settlements. The government also plans to introduce legislation to regulate fiat stablecoin issuers and is allowing potential issuers to test their business models in the “Stablecoin Issuer Sandbox.”
Furthermore, steps will be taken to promote the digital securities market. The HKMA will launch the “Digital Bond Subsidy Scheme” to incentivize financial institutions and issuers to adopt tokenization technology in capital market transactions.
Overall, Hong Kong’s Chief Executive’s 2024 Policy Address underscores the city’s commitment to fostering innovation in the financial sector and embracing the opportunities presented by virtual assets. The measures outlined in the address are aimed at positioning Hong Kong as a leading hub for digital finance and virtual asset trading.