Hong Kong Announces 2.0 Policy on Digital Assets Development, Igniting Market Frenzy over Crypto-friendly Companies and Stocks

Hong Kong Unveils Digital Assets Development Policy Statement 2.0, Paving the Way for a Global Hub

On June 26, 2025, the Hong Kong SAR Government released its Digital Assets Development Policy Statement 2.0, reinforcing its ambition to become a leading international hub for digital finance.

The new roadmap outlines a comprehensive approach to digital asset regulation, market infrastructure, and innovation strategy. It introduces a structured framework to enhance legal clarity, expand tokenized financial products, promote real-world use cases, and support talent and industry partnerships.

Notably, the policy shifts the official terminology from “virtual assets” to “digital assets,” aligning with global standards and signaling Hong Kong’s forward-looking positioning in the digital economy.

By embedding tokenization into traditional financial systems and regulatory regimes, the policy aims to accelerate the integration of digital assets with the real economy—placing Hong Kong at the forefront of compliant, institution-friendly digital transformation.

Johnny Ng’s Insights on the Policy’s Implications

Legislative Council member Johnny Ng framed the new policy as a strategic roadmap for establishing Hong Kong as a global digital asset hub. Central to this vision is the “LEAP” framework — Legal and Regulatory Optimization, Expansion of Tokenized Products, Advancement of Use Cases, and Talent and Partnership Development — designed to build a trusted, sustainable ecosystem deeply connected to the real economy.

Ng shared six key observations:

1. Terminology Alignment with Global Standards The shift from “virtual assets” to “digital assets” reflects international alignment and reinforces Hong Kong’s role in driving financial innovation.

2. Clear Focus on Innovation and Risk Management The policy aims to attract top-tier global institutions while using tokenization to improve financial market efficiency and support the real economy.

3. Defined Regulatory Roles The SFC oversees digital asset trading and custody, while the HKMA handles banking-related activities—minimizing regulatory overlap.

4. Government-Backed Incentives Legislative proposals will extend profits tax exemptions to digital assets in private funds and family offices. Tokenized government bonds will be issued regularly.

5. Lowering Market Barriers Stamp duty exemptions for ETF transfers will also apply to tokenized ETFs—reducing industry costs and boosting liquidity.

6. Ecosystem Funding and Talent Development Cyberport will launch a blockchain and digital asset pilot funding program to attract talent and grow Hong Kong’s project pipeline.

Ng concluded that Hong Kong is on track to become Asia’s benchmark for compliant digital asset innovation within 3–5 years—offering a “Hong Kong solution” for bridging traditional finance and the digital economy.

Local Brokerages Upgrade Type 1 Licenses to Tap Digital Asset Market

Several Hong Kong brokerages have upgraded their Type 1 licenses to include digital asset trading, in line with the government’s new policy.

Guotai Junan International Holdings (1788.HK) , a subsidiary of a Chinese state-backed brokerage, is among the early entrants after receiving approval from the Securities and Futures Commission (SFC).

Other firms, such as Victory Securities (08540.HK) and Edward Securities, have also completed similar license upgrades, signaling a broader industry shift.

These brokerages are primarily providing distribution-based services rather than operating proprietary exchanges. Specifically, they access licensed digital asset exchanges through omnibus accounts and offer clients regulated access to mainstream tokens like BTC and ETH — excluding high-risk altcoins or unvetted tokens.

Compliance measures such as know-your-customer (KYC) checks, suitability assessments, and investor education are strictly enforced, and participation is limited to eligible clients, with mainland Chinese residents explicitly excluded.

Market Responds with Enthusiasm, Guotai Junan Stock Soars

The policy launch and license upgrades have sparked a strong market reaction, with Guotai Junan International’s stock leading the charge. The stock jumped 198% to close at HK$3.7 on Wednesday, June 25, hit an intraday high of HK$7.02 on Thursday, June 26, then closed down 4.32% at HK$3.54.

Despite the pullback, it remains 185% above Tuesday’s HK$1.24 close. This surge reflects investor confidence in Hong Kong’s digital asset strategy and brokerage potential. The sustained optimism suggests a bullish outlook, with further license upgrades possibly lifting the industry’s valuation and attracting global capital.

As Hong Kong doubles down on digital asset reforms, global investors are watching closely for the city’s next regulatory breakthrough.