Blockchain technology has reshaped traditional finance in recent years, by enabling the securitization of assets through virtual tokens in Hong Kong. This innovation integrates the issuance, custody, and settlement of securities like stocks and bonds with smart contract programming, all governed by existing securities laws.
This approach has popularized Securities Token Offerings (STOs) as a favored method for companies to raise funds as per local news reports.
Lu Tingkuang, co-founder and chief strategy officer of HKbitEX, said that “Hong Kong’s crypto-asset license can provide trading of both cryptocurrencies and security tokens (STO).”
Hong Kong, with its crypto-asset license allowing trading of both cryptocurrencies and security tokens (STOs), stands out in the global market. This dual capability surpasses jurisdictions like Singapore and the US, where licenses typically cover only one service, such as cryptocurrency transactions for Coinbase in the US.
Despite Hong Kong’s cautious approach to its virtual asset market in the past, recent developments underscore its strategic advantages.
For instance, Hong Kong made headlines last year by successfully issuing an HK$800 million tokenized green bond under the Government Green Bond Program, marking a pioneering move in global finance.
Building on this success, additional digital green bonds totaling approximately HK$6 billion were issued earlier this year, attracting a diverse array of institutional investors globally.
The trend extends beyond government bonds. Taiji Capital introduced real estate fund securities tokens, revolutionizing real estate financing for professional investors.
Similarly, GF Securities (Hong Kong) launched tokenized securities linked to short-term commercial paper, further expanding the scope of digital finance.
The China Securities Regulatory Commission’s recent stance suggests a potential opening of STO investments to retail investors in Hong Kong, aimed at attracting more capital and fintech expertise to the region.
These developments highlight Hong Kong’s evolving role as a global leader in blockchain-based financial innovations, setting a precedent for integrating digital assets with traditional finance under robust regulatory oversight.
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