Review of the Development of Virtual Assets in Hong Kong in 2024

April: Asia's First Spot ETF for Virtual Assets Approved

The Hong Kong Securities and Futures Commission's official website has announced the approved list of virtual asset spot ETFs, which includes related products from several well-known asset management companies. This marks the first launch of such products in the Asian market, with the Ether spot ETF being among the first in the world.

June: Attention on Virtual Asset Trading Platform License Applications

As the China Securities Regulatory Commission requires virtual asset exchanges operating in Hong Kong to obtain licenses within a one-year transition period, many platforms are actively submitting applications. However, the news of some mainstream trading platforms withdrawing their applications has sparked discussions in the market about the prospects of virtual assets in Hong Kong.

July: Chinese E-commerce Giants Enter the Hong Kong Stablecoin Market

The Hong Kong Monetary Authority announced the list of participants in the stablecoin regulatory sandbox, and a subsidiary of a large Chinese e-commerce group announced plans to issue a cryptocurrency stablecoin pegged 1:1 to the Hong Kong dollar. This stablecoin will be issued based on a public blockchain, with reserves consisting of highly liquid and trustworthy assets, and it commits to complying with relevant laws and regulatory standards.

August: Hong Kong Monetary Authority Launches Ensemble Project Sandbox

The Hong Kong Monetary Authority has launched the Ensemble project sandbox, aimed at promoting the application of tokenization technology in the financial sector. The first phase of the trial covers four major themes: fixed income and investment funds, liquidity management, green finance, and trade supply chain financing. This project reflects Hong Kong's determination to innovate in the global financial market.

October: The Hong Kong Securities and Futures Commission Welcomes a New Chairman, Third Virtual Asset Exchange Approved

The Chief Executive of the Hong Kong Special Administrative Region has appointed a new chairman of the Securities and Futures Commission for a term of three years. The new chairman emphasized a commitment to cultivating a sustainable and vibrant capital market, promoting economic growth and innovation while protecting investor interests.

In the same month, the Hong Kong Securities and Futures Commission issued a license to a third virtual asset exchange, which focuses on security tokens and the tokenization of physical assets, aiming to enhance asset liquidity and create more financing and investment opportunities.

November: Hong Kong Stock Exchange launches virtual asset index series, digital banks start cryptocurrency trading services

The Hong Kong Stock Exchange officially launched a series of virtual asset indices, providing transparent and reliable benchmark prices for Bitcoin and Ethereum in the Asia timezone. This initiative aims to address the price discrepancies of virtual assets across global exchanges and provide a unified reference for investors.

A Hong Kong digital bank has become the first bank in Asia to offer cryptocurrency trading services for retail users, supporting Bitcoin and Ethereum transactions, with services limited to holders of Hong Kong identity cards.

December: The "Stablecoin Regulatory Draft" is released, and four new licensed exchanges are approved.

The Hong Kong Legislative Council has conducted the first reading of the "Stablecoin Ordinance Draft," which stipulates that activities related to the issuance of fiat stablecoins, Hong Kong dollar stablecoins, or the promotion of stablecoins to the public must obtain a license. Regulatory focus includes reserve asset management, protection of token holders' rights, and anti-money laundering requirements.

The Hong Kong Securities and Futures Commission announced the issuance of licenses to four virtual asset trading platforms, increasing the total number of licensed platforms to seven. The Commission plans to establish a consultation group in early 2025 to further enhance the regulation of virtual asset platforms.

At the end of the month, a legislative council member proposed the introduction of "Digital Connect," allowing mainland investors to buy and sell Hong Kong-recognized digital assets through a special channel to promote financial connectivity and innovative development between the two regions.