Hong Kong has taken significant strides in cryptocurrency and security token offerings (STOs), positioning itself ahead of financial hubs like Singapore and the United States. HKbitEX, a prominent player in the crypto exchange market, highlighted that, unlike other regions where licenses are limited to cryptocurrencies or STOs, Hong Kong’s comprehensive license caters to both.
Lu Tingkuang, co-founder and chief strategy officer of HKbitEX, emphasized the convenience of Hong Kong’s licensing approach. This dual capability simplifies operations for platforms like HKbitEX. It offers a broader spectrum of services compared to counterparts like Coinbase in the U.S., which is restricted to cryptocurrency transactions only.
Integration of Traditional Securities and Blockchain Technology
Blockchain technology has revolutionized traditional financial systems, introducing new products underpinned by smart contracts and regulated under securities laws. STOs are becoming increasingly popular for corporate financing, integrating the issuance, custody, and settlement of traditional securities like stocks and bonds with blockchain technology.
Hong Kong’s market for tokenized securities is rapidly expanding. Recent innovations include the launch of the world’s first government-issued tokenized green bond under the Government Green Bond Program, which raised HK$800 million with a yield of 4.05%. Following this, Hong Kong successfully issued digital green bonds earlier this year, raising approximately HK$6 billion from global institutional investors.
Revolutionary changes are underway in the private sector, particularly in real estate financing. Last year, Taiji Capital introduced real estate fund security tokens targeted at professional investors. GF Securities (Hong Kong) also successfully issued tokenized securities related to short-term commercial paper. The Hong Kong Securities and Futures Commission (SFC) has also announced plans to open STO investments to retail investors, a move expected to attract more financial technology talent and investment to the region.
