Remember when Hong Kong launched its own spot Bitcoin and Ethereum ETFs? Despite the initial buzz, overall trading volumes remain modest, and these products have yet to make a significant impact on the market. On April 30, 2024, the first day of trading, the combined turnover of all six spot virtual asset ETFs was less than HKD 100 million—a figure that would barely register in the U.S. market.(1)
As of today, the total assets under management (AUM) for these six ETFs stand at approximately $333 million, still falling well short of Bloomberg analysts’ initial $1 billion target. Over the same period, U.S. spot Bitcoin ETFs have attracted over $56 billion in net inflows and now manage nearly $90 billion in assets. Hong Kong’s ETF market is just a fraction of its American counterpart.(2)
But if you think Hong Kong’s virtual asset policy is all hype with little substance, you might be missing what’s happening beneath the surface.
While ETF trading volumes are underwhelming, the real crypto story in Hong Kong isn’t on the ETF price charts. It’s unfolding in the pace of license issuance, the depth of traditional financial institutions entering the space, and the transition of real-world asset (RWA) tokenization from sandbox pilots to real-world deployment.
Trading Infrastructure: From 2 to 12 Licensed Platforms—A Licensing Boom
In 2023, when the Hong Kong Securities and Futures Commission (SFC) first approved virtual asset trading platforms, only two firms received licenses: OSL and HashKey. These pioneers were the only platforms authorized to offer crypto trading services to retail clients.
By mid-2025, that number had grown to 12 licensed Virtual Asset Trading Platforms (VATPs).
What’s even more noteworthy is the background of these new entrants. Four of the twelve platforms are subsidiaries of major online brokerages:
- PantherTrade, a wholly owned subsidiary of Futu Securities, obtained its VATP license in January 2025.
- YAX (Hong Kong), under Tiger Brokers.
- EXIO, backed by Huasheng Capital, a subsidiary of Sina.
- VDX, under Victory Securities.
Other notable entrants include Bullish HK Markets (the Hong Kong arm of Bullish, backed by Peter Thiel) and DFX Labs.
From "Type 1 License Upgrades" to Dedicated VA Licenses: A Regulatory Paradigm Shift
In the first half of 2025, the market was abuzz as traditional brokerages collectively upgraded their Type 1 licenses to enter the virtual asset sector. Over 42 institutions were approved to offer virtual asset trading services via omnibus account arrangements, including Guotai Junan International, Futu Securities (Hong Kong), Interactive Brokers, and ZA Bank. In June 2025, Guotai Junan International secured a "full virtual asset license," and Hong Kong stocks surged nearly 200% the next day following the announcement.(3)
However, this "Type 1 license upgrade" framework essentially extends the existing Securities and Futures Ordinance (SFO) licensing system, rather than establishing a standalone, comprehensive regulatory regime for virtual asset intermediaries. Brokerages still need to execute trades through licensed exchanges (like HashKey) via omnibus accounts, pre-fund arrangements are required, retail trading is largely restricted to large-cap tokens, and custody remains primarily within exchanges or the banking system.
Additionally, the relevant rules are scattered across joint circulars, appendices, and individual licensing conditions, resulting in a fragmented compliance framework with limited integration.
The real turning point came on December 24, 2025. The Financial Services and the Treasury Bureau (FSTB) and the SFC jointly released a consultation conclusion, finalizing a brand-new licensing regime specifically tailored for virtual assets under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), with legislation targeted for 2026. On the same day, a further one-month consultation was launched, covering virtual asset investment advisory and asset management licenses.
The new framework splits virtual asset businesses into four distinct license categories:
Virtual Asset Dealing License (VA Dealing): Modeled after the SFO Type 1 (securities dealing), this license covers activities such as facilitating the purchase, sale, subscription, or underwriting of virtual assets in the course of business.
It includes margin trading, staking, virtual asset lending, as well as decentralized platform and P2P trading activities. Virtual asset derivatives (such as futures and structured products) remain regulated under SFO Types 1, 2, and 11, while tokenized securities continue to fall under the existing securities regulatory regime to avoid overlapping oversight.
Virtual Asset Advisory License (VA Advisory): Modeled after SFO Type 4, this license is required for those providing advice on virtual asset transactions or publishing research and analysis related to virtual asset investments.
Virtual Asset Management License (VA Management): Modeled after SFO Type 9, this license covers discretionary management of virtual asset investment portfolios. A key regulatory change is the removal of the previous 10% de minimis threshold.
Previously, the enhanced regulatory requirements were triggered only if virtual assets made up more than 10% of a portfolio’s total assets. Under the new regime, any involvement in virtual asset portfolio management—regardless of proportion—requires a dedicated license, eliminating gray areas caused by market volatility.
Virtual Asset Custody License (VA Custody): This newly created license applies to institutions responsible for safeguarding, controlling, or managing clients’ virtual asset transfer tools (typically private keys).
Minimum capital requirements include at least HKD 10 million in paid-up share capital and HKD 3 million in liquid capital. Virtual asset dealers must custody client assets with a Hong Kong-based, SFC-licensed virtual asset custodian, enforcing mandatory local custody to mitigate cross-border execution risks.
HashKey’s Role as the "Hub"
Source: Hashkey Pro Docs
Within this ecosystem, HashKey Exchange serves as the infrastructure hub. As of June 2025, HashKey announced its omnibus account services covered 90% of licensed brokerages, providing trading, custody, and settlement services to over 30 institutions—including Guotai Junan International, Futu, and Tiger Brokers. In other words, most brokerages’ crypto trades are ultimately executed through HashKey at the infrastructure level.(4)
RWA Tokenization: From Concept to Real-World Implementation
Compared to spot ETFs and trading platform licenses, which have yet to achieve significant scale or broad practical application, the development of RWAs and tokenized assets in Hong Kong is progressing more tangibly.
In August 2024, the Hong Kong Monetary Authority launched Project Ensemble, a sandbox initiative focusing on four areas: fixed income and investment funds, liquidity management, green finance, and trade and supply chain finance. Since then, several representative tokenization and RWA projects have emerged in the Hong Kong market, signaling a shift from proof-of-concept to real-world deployment.
In the renewable energy sector, Longshine Group and Ant Digital Technologies completed cross-border RWA financing of about RMB 100 million using EV charging station revenue rights as underlying assets. GCL Energy Technology, in partnership with Ant Digital, tokenized photovoltaic asset revenue rights and completed over RMB 200 million in financing. Meanwhile, Xunying Group is exploring RWA applications for battery swap assets in two-wheeler vehicles, reflecting the expanding range of use cases.(5)
Progress is also evident in fund products. In February 2025, ChinaAMC (Hong Kong) launched a tokenized HKD money market fund, widely regarded as one of the first tokenized funds for retail investors in Asia-Pacific, with an initial size of around $107–110 million and distribution through OSL, Futu, and other channels.(6)
In March 2025, Bosera Funds (International) and HashKey received SFC approval for tokenized HKD and USD money market ETF shares. By July 2025, ChinaAMC (Hong Kong) introduced tokenized USD and RMB money market funds, with the RMB fund reportedly being the world’s first RMB-denominated tokenized fund.(7)
By the second half of 2025, RWA applications began expanding beyond renewable energy. Dering Capital announced a partnership with Asseto to explore tokenization of up to HKD 500 million in physical assets, including property rights and fund assets. Hanyu Pharmaceutical signed an MoU with KuCoin to pilot RWA projects using future revenue rights from innovative drugs as the underlying asset. Other medical and real estate firms have also started exploring tokenization of intellectual property and commercial real estate.
Recently, the market has seen tokenization cases for precious metals, such as Eddid Financial’s silver token and the listing of XAUM—a gold token backed by LBMA-certified physical gold—on EX.IO, showing that RWA use cases are expanding into commodities as well.(8) (9)
Additionally, Esperanza Securities, with regulatory approval, launched two tokenized entertainment investment projects, including the "Chris Wong 40th Anniversary Hong Kong Concert 2026" at the Hong Kong Coliseum and a K-pop concert in Malaysia. Overall, these cases demonstrate the continually expanding scope of asset tokenization.(10)
Hong Kong Government Tokenized Bonds: From Pilot to Institutionalization
While tokenization at the corporate and fund level is still expanding, the development of Hong Kong’s government tokenized bonds clearly shows the authorities are institutionalizing this innovation.
Source: Nomura
The Hong Kong government has completed several rounds of tokenized government bond issuances. In Q4 2025, the government issued its third batch of tokenized green bonds, totaling HKD 10 billion. Authorities have since indicated that such tokenized bonds will become a regular feature.
In the 2026–27 budget, Financial Secretary Paul Chan announced that the Hong Kong Monetary Authority’s wholly owned subsidiary, CMU OmniClear Holdings, would develop a dedicated digital asset platform to support the issuance, registration, and settlement of tokenized bonds, with plans to expand to other digital assets over time.(11)
This signals that tokenized bonds in Hong Kong are no longer a one-off experiment but are being integrated into the city’s long-term financial infrastructure.
CMU OmniClear: The Backbone for Tokenized Bonds
CMU OmniClear plays a pivotal role here. It operates the Central Moneymarkets Unit (CMU), Hong Kong’s central bond depository and settlement system, which is also the core infrastructure for government bond issuance and settlement.
In other words, both traditional and tokenized government bonds rely on the CMU for registration, custody, and settlement. Integrating tokenized bonds into the CMU OmniClear platform is not about reinventing the wheel but about connecting digital securities directly to Hong Kong’s existing bond infrastructure.
This arrangement is significant in three main ways:
- More standardized processes: Tokenized bonds are now part of a mature settlement system.
- Clearer regulation: The Hong Kong Monetary Authority is directly involved in oversight and implementation.
- Greater scalability: The platform is designed for institutional-grade use from the outset.
With the Hong Kong Stock Exchange acquiring a 20% stake in CMU OmniClear Holdings in November 2025, the platform is increasingly seen as a critical piece of infrastructure for Hong Kong’s fixed income and money markets.(12)
Overall, tokenization in Hong Kong is developing along two main tracks: one driven by market-led initiatives in corporates, funds, and various physical assets; the other by institutionalization through government bonds and core financial infrastructure. The latter is particularly noteworthy, as it signals tokenization is gradually moving into the heart of Hong Kong’s financial system.
Stablecoin Legislation: Bridging the "Last Mile" for RWA
RWA tokenization faces a structural challenge: assets are on-chain, but the capital remains off-chain.
While the underlying assets can be digitized and put on-chain, key processes—funding, subscription and redemption, and profit distribution—still rely on the traditional fiat system. There’s not yet a true closed loop between on-chain and off-chain. Stablecoins are the essential infrastructure to bridge this gap.
On May 21, 2025, Hong Kong’s Legislative Council passed the Stablecoin Bill, which took effect on August 1, 2025. Key requirements include:
- Issuers must be Hong Kong-registered entities with a minimum paid-up capital of HKD 25 million.
- Reserve assets must fully (100%) cover the circulating supply and be strictly segregated from proprietary assets.
- Holders have a statutory right to redeem at face value.
Source: HKMA (as of 2/4/2026)
In terms of market rollout, the Hong Kong Monetary Authority has issued the first two stablecoin issuer licenses to HSBC Hong Kong and Anchorpoint Financial Limited—a joint venture between Standard Chartered, Animoca Brands, and HKT.(13)
HSBC plans to leverage its license to launch an HKD stablecoin in the second half of 2026, integrating it with PayMe and the HSBC HK mobile app. The initial use cases will focus on three areas: P2P transfers (allowing users to send stablecoins instantly via PayMe and the HSBC HK app); P2M payments (enabling stablecoin payments to participating merchants via PayMe); and tokenized investments (allowing users to subscribe to tokenized investment products with stablecoins via the HSBC HK app).
Standard Chartered, meanwhile, has indicated that Anchorpoint Financial Limited will begin a phased rollout of the regulated, HKD-pegged stablecoin HKDAP in Q2 this year. Anchorpoint will pursue a B2B2C model, leveraging the networks of designated distributors to broaden reach and promote adoption in retail and payment scenarios.
Several observations emerge from these market strategies. First, stablecoins currently function more as underlying settlement infrastructure than as standalone products for end users. For consumers, their presence may not be immediately obvious, but they help optimize payment and clearing processes by reducing transaction costs, increasing transfer efficiency, and moving toward "instant settlement."
Second, retail adoption of stablecoins in Hong Kong is still in its early stages. Demand and usage habits have yet to fully develop, and it remains to be seen how quickly the mass market will open up. For now, distribution is still largely institution-driven—via banks, licensed entities, and their networks—rather than through organic retail uptake.
As such, there remains considerable uncertainty regarding product rollout, user coverage, and actual penetration. While Hong Kong’s stablecoin market has entered the implementation phase, commercialization and retail adoption are still in the exploratory stage.
A Sober Look at the Big Picture: Where Are the Gaps?
At this point, it’s important to address several key issues:
ETF scale remains far behind. As of today, Hong Kong’s six virtual asset ETFs collectively manage 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 placement phases. While projects like Longshine’s charging stations and GCL’s solar assets are promising demonstrations, overall financing volumes remain in the RMB 100–200 million range—far from the trillion-dollar tokenized asset vision often discussed in the market.
For commodity tokenization, demand-side development is still uncertain. In the U.S., tokenized gold is increasingly used as collateral in DeFi lending and is open to retail investors, creating a functional ecosystem. In contrast, most Hong Kong products are still aimed at professional investors, with retail channels not yet fully open. This reflects a cautious regulatory stance on investor protection.
The "on-chain assets, off-chain capital" disconnect is not fully resolved. While stablecoin regulations are in place, there’s still a journey from having a legal framework to achieving widespread, practical adoption.
Going forward, the market should focus not just on license issuance, but on which scenarios stablecoins will see real usage first. Realistic applications include cross-border payments and transfers, settlement of on-chain asset trades, subscription and redemption of tokenized funds or bonds, and cash management and clearing within enterprises or platforms.
All of these can help address the current disconnect where RWAs are on-chain but capital remains off-chain. The Hong Kong Monetary Authority has made it clear that only a few licenses will be issued initially, and applicants must demonstrate clear use cases, robust operations, and credible business models. This shows regulators are focused on real-world adoption, not just "issuing a coin for the sake of it."
Main Data Sources:
- https://www.reuters.com/markets/currencies/asias-first-spot-bitcoin-ether-etfs-gain-hong-kong-debut-2024-04-30/?
- https://www.coinglass.com/hk-etf-eth
- https://www.21jingji.com/article/20250626/herald/7a7d09161b82588b801777a3d6f713db.html
- https://www.wublock123.com/news/news-44551
- https://www.21jingji.com/article/20250710/herald/10533d03952cd28b3c08f3be0ea28e1b.html
- https://www.chinaamc.com.hk/zh-hant/product/chinaamc-hkd-digital-money-market-fund/
- https://group.hashkey.com/newsroom/hashkey-group-and-bosera-launch-world-s-first-tokenised-money-market-etf
- https://www.prnewswire.com/apac/news-releases/eddid-financial-coordinates-issuance-of-hong-kongs-first-silver-rwa-302728489.html
- https://phemex.com/news/article/exio-launches-xaum-gold-token-for-professional-investors-57051
- https://finance.mingpao.com/fin/instantf/20260223/1771841319302/esperanza%E8%AD%89%E5%88%B8%E6%8E%A8%E5%A8%9B%E6%A8%82%E7%94%A2%E6%A5%AD%E4%BB%A3%E5%B9%A3%E5%8C%96-%E9%BB%83%E5%87%B1%E8%8A%B9%E6%BC%94%E5%94%B1%E6%9C%83%E6%88%90%E9%A6%96%E5%80%8B%E4%BB%A3%E5%B9%A3%E5%8C%96%E9%A0%85%E7%9B%AE
- https://www.budget.gov.hk/2026/chi/ui.html
- https://www.hkex.com.hk/News/News-Release/2025/251112news?sc_lang=zh-HK
- https://www.coindesk.com/policy/2026/03/24/hong-kong-awards-first-stablecoin-licenses-to-hsbc-standard-chartered-led-group
About Gate Ventures
Gate Ventures is the venture capital arm of Gate, focusing on investments in decentralized infrastructure, ecosystems, and applications, with a mission to reshape the world in the Web 3.0 era. Gate Ventures partners with global industry leaders to empower innovative teams and startups, redefining how society and finance interact.
For more information, please visit: Official Website | X | Telegram | LinkedIn | Medium
