The HKSAR government on Monday released its latest policy statement related to the prospects for developing virtual assets, including issuing tokenized green bonds and preparing to develop the digital Hong Kong dollar.

More than 200 key financial entrepreneurs joined the Fintech Week that kicked off Monday in Hong Kong, which is one of the critical events for the city to demonstrate its confidence in developing its economy amid the COVID-19 recovery.

Paul Chan, Financial Secretary of HKSAR, spoke to Fintech Week virtually due to his infection with Covid 19 during his trip abroad to Saudi Arabia. Chan presented the latest policy statement on virtual assets to the public and said that “We want our policy stance to be clear to global markets, to demonstrate our determination to explore financial innovation together with the global virtual asset community.” hoping to catch up with the advantages and innovation of Fintech in terms of virtual assets.

“The policy statement spells out our vision and approach, regulatory regimes, insights into investor exposures, and our pilot projects to harness the technological benefits and financial innovations that virtual assets bring.”

According to the latest policy statement issued by the government. Serval pilot projects are ongoing, including:

(a) Issuance of NFTs for Hong Kong Fintech Week (“HKFTW”) 2022: a proof of concept project on our part to engage the Fintech and Web3 community;

(b) Tokenization of green bonds: tokenization of the issuance of green government bonds for subscription by institutional investors;

(c) e-HKD: The potential ‘backbone’ and anchor linking legal tender and VA, offering the price stability and confidence needed to power further innovations.

Green bond tokenization

Regarding the tokenization of issued green bonds, Eddie Yu, CEO of the Hong Kong Monetary Authority (HKMA), spoke at the same event, revealing that the authority plans to issue the first batch of green bonds this year globally. , with the aim of promoting small-scale retail product investors first. Details will be announced later.

Meanwhile, cross-border payment with digital Hong Kong dollars, or e-HKD, is also underway. The regulator’s head said the mBridge pilot tests were going well. More than $170 million in Hong Kong dollars have been transacted with 160 broader cross-transactions, which are associated with around 20 commercial banks in four regions.

Opening Market for VA ETF Trading

Given the growing acceptance of virtual assets as a vehicle for investment allocation by global institutional or individual investors, the policy statement says that Hong Kong’s recognition would open up the possibility of allowing Exchange Traded Funds (ETFs) in virtual assets in Hong Kong.

However, the turmoil and volatility triggered by the so-called crypto winter in the first half of the year resulted in significant exposure for investors and hampered crypto market performance. In terms of developing cryptocurrency trading, Yu, the head of HKMA, said that Hong Kong is capable of developing the virtual asset ecosystem, as it is supported by sufficient investor education and a comprehensive regulatory system.

The fintech industry welcomes policy statements in general.

Adrian Cheng, Executive Director of New World Development, welcomes the HKSAR’s latest stance on the development of virtual assets in the city.

Speaking to Blockchain.News in a statement, Cheng said that he fully supports the government issue.

“With our unique position in the Greater Bay Area, Hong Kong will dominate the regional development of GBA’s cross-border blockchain infrastructure and blockchain ecosystem.”

New World Development believes that the virtual asset financial markets, CBDC payment and GBA blockchain infrastructures would be key strengths and pillars for the city, transforming the city into a digital financial hub.

Cheng suggested that regulations in Hong Kong “should evolve and expand beyond the current SFC Type 1 and 2 client asset holding licensing and trustee license regimes.”

The real estate company is actively involved in the crypto community and NFT projects. In August, Cheng bought a 101 Azukis NFT but also invested in RTFKT and Animoca Brands.

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