Do you remember Hong Kong launching its own spot Bitcoin and Ethereum ETFs? Overall trading volume remains relatively limited so far and has not yet created a significant market impact. On the first day of listing on April 30, 2024, six virtual asset spot ETFs had a total trading volume of less than 100 million Hong Kong dollars, a figure that would hardly cause a ripple in the U.S. market. (1)

As of today, the total assets under management for these six ETFs are approximately $333 million, still far from Bloomberg analysts’ initial expectation of a “$1 billion” target. Meanwhile, in the U.S., Bitcoin spot ETFs have seen net inflows exceeding $56 billion, managing nearly $90 billion in assets. Hong Kong’s ETF size is just a fraction of that. (2)

But if you think Hong Kong’s virtual asset policies are just “big talk but little action,” you might be overlooking what’s happening beneath the surface.

ETF trading volume is indeed awkward, but Hong Kong’s real crypto story isn’t on the K-line chart of ETFs. It lies in the progress of licensing, the depth of traditional financial institutions’ involvement, and the advancement of RWA tokenization from sandbox experiments to real-world applications.

Trading Infrastructure: From 2 to 12 Licenses, a Licensing Boom

In 2023, when the Hong Kong Securities and Futures Commission (SFC) approved virtual asset trading platforms, only two had obtained licenses: OSL and HashKey. They were the earliest pioneers and the only platforms capable of providing crypto trading services to retail clients.

By mid-2025, this number had expanded to 12 licensed Virtual Asset Trading Platforms (VATPs).

More noteworthy is the composition of entrants’ backgrounds. Among the 12, four come from the internet brokerage camp:

• Futu Securities’ wholly owned subsidiary, PantherTrade, obtained a VATP license in January 2025

• Tiger International’s YAX (Hong Kong)

• EXIO, invested by Sina’s Huasheng Capital

• VDX, under Victory Securities

Additionally, there are Bullish HK Markets (the Hong Kong entity of the crypto exchange Bullish, backed by Peter Thiel), DFX Labs, and others.

From “License 1 Upgrade” to a Dedicated VA License: A Paradigm Shift in Regulation

In the first half of 2025, news of traditional brokerages collectively upgrading License 1 to enter the virtual asset space flooded the market. Over 42 institutions were approved to provide virtual asset trading services through comprehensive account arrangements: Guotai Junan International, Futu Securities (Hong Kong), Interactive Brokers, ZhongAn Bank, and others. In June 2025, Guotai Junan International obtained a “full virtual asset license,” and the day after the announcement, Hong Kong stocks surged nearly 200%. (3)

However, this “License 1 upgrade” framework essentially extends and adds to the existing Securities and Futures Ordinance (SFO) licensing system, rather than establishing a fully independent, comprehensive virtual asset intermediary regulatory regime. Brokers still need to execute trades through comprehensive accounts on licensed exchanges (like HashKey), with pre-funded arrangements. The scope of retail trading remains mainly limited to large-cap tokens, and custody still primarily relies on exchanges or banking systems.

Meanwhile, relevant rules are scattered across joint circulars, annex clauses, and individual license conditions, resulting in a fragmented compliance framework with limited systemic integration.

A true turning point arrives on December 24, 2025. The Financial Services and the Treasury Bureau (FSTB) and the SFC jointly released a consultation summary, officially finalizing a new, tailored licensing regime for virtual assets, incorporated into the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) framework, with legislative goals set for 2026. On the same day, a one-month further consultation was launched, covering virtual asset investment advisory and asset management licenses.

The new framework divides virtual asset activities into four separate license categories:

Virtual Asset Trading License (VA Dealing), aligned with the current SFO License 1 (securities trading), covering activities that facilitate buying, selling, subscription, or underwriting arrangements of virtual assets during business operations.

It includes margin trading, pledging, virtual asset lending arrangements, as well as activities on decentralized platforms and P2P trading models. As for virtual asset derivatives (such as futures and structured products), they remain under the supervision of SFO Licenses 1, 2, and 11; tokenized securities continue to fall under the existing securities regulatory framework to avoid regulatory overlap.

Virtual Asset Investment Advisory License (VA Advisory), aligned with SFO License 4, applicable to providing clients with advice on virtual asset trading or issuing research reports and analysis related to virtual asset investments.

Virtual Asset Asset Management License (VA Management), aligned with SFO License 9, applicable to managing virtual asset portfolios on behalf of clients. A key regulatory change is the removal of the previous de minimis threshold of 10%.

Under the old system, virtual assets in a portfolio exceeding 10% of total assets would trigger regulatory upgrades; the new system explicitly states that any management of virtual asset portfolios requires a dedicated license regardless of proportion, eliminating the gray area caused by market fluctuations pushing assets over the threshold.

Virtual Asset Custody License (VA Custody), a newly established standalone license, applies to institutions responsible for safekeeping, controlling, or managing client virtual asset transfer tools (usually private keys).

Minimum capital requirements include paid-up share capital of at least HKD 10 million and at least HKD 3 million in working capital. Additionally, virtual asset traders must custody client assets with licensed virtual asset custody institutions based in Hong Kong, forming a mandatory local custody arrangement to reduce cross-border custody risks.

HashKey’s “Hub” Role

Source: Hashkey Pro Docs

In the current ecosystem, HashKey Exchange acts as a foundational infrastructure hub. In June 2025, HashKey announced that its Omnibus comprehensive account service covered 90% of licensed brokerages, providing virtual asset trading, custody, and settlement services to over 30 institutions, including Guotai Junan International, Futu, Tiger. In other words, most crypto trades by brokerages are ultimately executed through HashKey at the core. (4)

RWA Tokenization: From Concept to Practice

Compared to spot ETFs and trading platform licenses, which still lack significant scale and practical application scenarios, RWA and tokenized assets are more grounded.

In August 2024, the Hong Kong Monetary Authority launched Project Ensemble sandbox, focusing initially on four areas: fixed income and investment funds, liquidity management, green finance, and trade & supply chain finance. Subsequently, several notable tokenization and RWA projects emerged in Hong Kong, indicating that related applications are moving from proof-of-concept to more tangible implementations.

In the renewable energy sector, Longxin Group and Ant Financial Science & Technology completed cross-border RWA financing of about RMB 100 million using charging pile revenue rights as underlying assets; GCL System Integration Technology also partnered with Ant to tokenize photovoltaic asset rights and completed over RMB 200 million in financing. Meanwhile, Xunying Group is exploring RWA related to electric vehicle swapping assets, reflecting expanding application scenarios. (5)

In fund products, progress is also evident. Huaxia Fund (Hong Kong) launched a Hong Kong dollar-denominated tokenized money market fund in February 2025, widely regarded as one of the first tokenized funds targeting retail investors in Asia-Pacific, with an initial size of about $107–110 million, distributed through channels like OSL and Futu. (6)

In March 2025, BOC International Fund and HashKey collaborated on tokenized shares of Hong Kong dollar and USD money market ETFs, approved by the SFC. By July 2025, Huaxia Fund (Hong Kong) launched USD and RMB tokenized money market funds, with the RMB fund reported as the world’s first RMB-denominated tokenized fund. (7)

By the second half of 2025, RWA applications expanded from renewable energy to more sectors. Delin Holdings announced cooperation with Asseto to explore tokenization of physical assets up to HKD 500 million, including property rights and fund assets; HanYu Pharmaceutical signed a cooperation intent with KuCoin to pilot RWA based on future revenue rights of innovative drugs in Hong Kong; and some medical and real estate companies are exploring tokenization of intellectual property and commercial real estate.

Recent market examples include precious metal asset tokenization, such as Aide Financial’s silver tokens and EX.IO listing on-chain gold tokens backed by LBMA-certified physical gold, indicating RWA scenarios are extending further into commodities. (8) (9)

Additionally, Esperanza Securities has launched two tokenized entertainment investment projects under regulatory approval, including the “Anthony Kwan 40 Years of Hong Kong Concert 2026” at the Hong Kong Coliseum and a Korean boy band concert in Malaysia. Overall, these cases reflect the expanding scope of tokenized assets. (10)

Hong Kong Government Tokenized Bonds: From Pilot to Normalization

While corporate and fund-level tokenization continues to expand, the development of Hong Kong’s government tokenized bonds more clearly demonstrates official efforts to institutionalize this process.

Source: Nomura

The Hong Kong government has completed multiple rounds of issuance of tokenized government bonds. In Q4 2025, the SAR government issued its third batch of tokenized green bonds, totaling HKD 10 billion. Subsequently, authorities indicated that such tokenized bonds would gradually become a regular issuance practice.

In the 2026–27 fiscal budget, Financial Secretary Paul Chan proposed that the Monetary Authority’s wholly owned subsidiary, CMU OmniClear, develop a dedicated digital asset platform to support issuance, registration, and settlement of tokenized bonds, with plans to expand to more types of digital assets. (11)

This signals that tokenized bonds in Hong Kong are no longer just experimental innovations but are beginning to be integrated into long-term financial infrastructure.

CMU OmniClear: The Infrastructure Backbone for Tokenized Bonds

CMU OmniClear plays a key role here. It is the operator of Hong Kong’s Central Maturity and Settlement System (CMU) for bonds, which is also a crucial infrastructure for Hong Kong government bond issuance and settlement.

In other words, whether traditional or tokenized, bonds’ registration, custody, and settlement rely on the CMU system. Placing tokenized bonds on the CMU OmniClear platform doesn’t mean starting from scratch but directly connecting digital securities to Hong Kong’s existing bond issuance and settlement system.

The significance of this arrangement lies in three points:

• More standardized processes: Tokenized bonds are integrated into a mature settlement system

• Clearer regulation: Supervised directly by the HKMA system

• Easier to scale: The platform is designed for institutional use from the outset

With HKEX’s stake of 20% in CMU OmniClear since November 2025, the platform is further regarded as a key infrastructure to promote Hong Kong’s fixed income and money markets. (12)

Overall, Hong Kong’s tokenization development has gradually formed two main tracks: one focused on market-based exploration by enterprises, funds, and various entities; the other on institutionalization based on government bonds and core financial infrastructure. The latter is especially noteworthy because it indicates that tokenization is steadily entering the core of Hong Kong’s financial system.

Stablecoin Legislation: Bridging the “Last Mile” of RWA

RWA tokenization always faces a structural issue: assets are on-chain, but funds remain off-chain.

While underlying assets can be digitized and on-chain, key processes like financing, subscription, redemption, and profit distribution often still depend on traditional fiat systems, and a true on-chain-off-chain closed loop has yet to form. Stablecoins are a crucial infrastructure to bridge this gap.

On May 21, 2025, the Hong Kong Legislative Council passed the “Stablecoin Bill” in third reading, which took effect on August 1, 2025. Core requirements include:

• Issuers must be registered entities in Hong Kong, with a minimum paid-up capital of HKD 25 million

• Reserves must fully cover circulating stablecoins (100%) and be strictly segregated and held in custody

• Holders have statutory rights to redeem at face value

Source: HKMA ( As of 2/4/2026 )

In terms of market deployment, the HKMA has issued its first two stablecoin licenses, granted to Hongkong and Shanghai Banking Corporation Limited (HSBC HK) and Anchorpoint Financial Limited—the latter a joint venture between Standard Chartered, Animoca Brands, and Hong Kong Telecom. (13)

HSBC plans to leverage this license to launch a HKD stablecoin in late 2026, integrating with Hong Kong’s two major digital channels—PayMe and HSBC HK Mobile Banking App. In the initial phase, the main use cases include: 1) P2P transfers using stablecoins via PayMe and HSBC HK App; 2) P2M payments to merchants; 3) tokenized investment subscriptions and redemptions through HSBC HK App.

Meanwhile, Standard Chartered’s Anchorpoint Financial Limited plans to gradually roll out a regulated, HKD-pegged stablecoin HKDAP starting in Q2 this year. Its business model adopts a B2B2C approach, leveraging existing distribution networks to expand HKDAP into retail and payment scenarios.

From their market strategies, a few points are observable. First, stablecoins at this stage are more like underlying settlement infrastructure rather than standalone consumer products. Their presence is less noticeable to end users, mainly optimizing payment and clearing processes—reducing transaction costs, improving fund transfer efficiency, and moving toward “trade equals settlement.”

Second, retail adoption of stablecoins in Hong Kong remains in early stages, with demand and usage habits not yet fully formed. Whether they can quickly penetrate the mass market remains uncertain. Currently, distribution channels are still dominated by banks, licensed institutions, and their partner networks, with market expansion mainly driven by institutions rather than retail users.

Therefore, in terms of product rollout, user coverage, and actual penetration, there is still considerable uncertainty. Overall, Hong Kong’s stablecoin market has entered the implementation phase, but in terms of commercialization and retail adoption, it remains in an early exploratory stage.

Looking at the Big Picture: Where Are the Gaps?

At this point, it’s necessary to objectively acknowledge several issues:

ETF scale gap remains huge. As of today, Hong Kong’s six virtual asset ETFs total about $333 million. In the same period, U.S. Bitcoin ETFs manage nearly $90 billion, with net inflows exceeding $56 billion. The scale gap is at least two orders of magnitude.

Most RWA projects are still in sandbox or private placements. While cases like Longxin’s charging piles and GCL’s photovoltaic projects are somewhat illustrative, overall financing remains mainly in the RMB 100 million to 200 million range, far from the “trillion-dollar tokenized assets” vision discussed widely.

In commodities tokenization, demand-side development also faces uncertainties. For example, in the U.S. market, tokenized gold has gradually been incorporated into DeFi applications like collateralization and leveraged lending, accessible to retail investors, forming a certain ecosystem. In contrast, most Hong Kong products are still mainly aimed at professional investors, with retail channels not fully open, reflecting cautious policy attitudes toward investor protection.

The “on-chain assets, off-chain funds” disconnect has not been fully resolved. Although the stablecoin regulation has been enacted, the path from “regulated” to “widely used” stablecoins still has a way to go.

Next, the market will focus not just on license issuance but on where stablecoins will first be practically used. Realistic scenarios include: cross-border payments and fund transfers, on-chain asset trading settlement, subscription and redemption of tokenized funds or bonds, and internal cash management and clearing for enterprises or platforms.

These scenarios can help address the current “assets on-chain, funds off-chain” disconnect in RWA. The HKMA has also explicitly stated that the number of licenses issued initially will be small, and applicants must demonstrate clear use cases, sound operational capacity, and credible business models. This indicates that regulators are more concerned with “real-world implementation” rather than just “issuing a token first.”

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About Gate Ventures

Gate Ventures is the venture capital arm of Gate, focusing on investments in decentralized infrastructure, ecosystems, and applications, dedicated to reshaping the Web 3.0 era. Working with industry leaders worldwide, Gate Ventures empowers innovative teams and startups to redefine social and financial interactions.

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