Hong Kong is trying to play a role that requires extremely high balancing skills in this financial transformation. Article authors and editors: Liang Yu, Zhao Yidan Article source: RWA Research Institute

On February 11, 2026, Hong Kong Special Administrative Region Chief Executive John Lee delivered a video speech at the Consensus 2026 Global Blockchain Summit, clearly announcing Hong Kong’s next key actions in the field of digital assets: the first batch of stablecoin issuer licenses regulated by the Hong Kong Monetary Authority are expected to be officially implemented in March 2026. This is not only the first test of Hong Kong’s regulatory framework moving from text to market since the “Stablecoin Ordinance” came into effect in August 2025, but also a core piece of its strategy to build a “global digital asset innovation center.”

What the policy gives to the market is not so much an admission permit as a solemn commitment to “institutional certainty.” Hong Kong is trying to forge its deep legal and financial infrastructure into the most scarce “trust machine” in the digital age.

In addition to the “compliance high-voltage line” of stablecoins, the virtual asset market regulatory roadmap simultaneously promoted by the Hong Kong Securities and Futures Commission (SFC) aims to activate market liquidity. This dual strategy of “legislative regulation” and “market cultivation” jointly points to a grander vision: to pave a “highway” that combines safety and efficiency for the next generation of digital financial forms such as real-world assets (RWA). As global capital is still looking for a credible digital entry point, Hong Kong is trying to build its digital financial “moat” with a systematic regulatory language.

I. What does Hong Kong want to do? From a traditional financial center to a trusted digital asset center

Hong Kong’s Policy Statement 2.0 released last June marks a new stage in its digital asset strategy of “building a trusted innovation ecosystem.” The essential goal of this stage is to provide basic layer services for the global digital asset market—especially those complex assets that require strong trust endorsement.

Under the “one country, two systems” principle, Hong Kong’s rule of law tradition, independent judicial power, common law system, free flow of capital, and low tax system constitute its unique institutional endowment. These cornerstones of the traditional financial era are being systematically transformed into competitive advantages in the digital age. According to the latest data, Hong Kong ranks fourth in the world in terms of digital competitiveness, and its talent ranking also ranks fourth, and it has 5 of the world’s top 100 universities. This talent and institutional foundation provides support for the construction of its regulatory framework.

Hong Kong regulators adhere to the principle of “same business, same risk, same rules” and gradually incorporate virtual asset activities into a regulatory system similar to traditional finance. This path choice reflects a basic judgment: only when institutional certainty is high enough can it attract truly meaningful institutional funds to enter the market.

II. The first step in regulation: creating the safest “digital Hong Kong dollar”

The “Stablecoin Ordinance” officially came into effect in August 2025, establishing a clear licensing system for fiat currency stablecoin issuers. The financial essence of this system lies in incorporating “monetary liabilities” into bank-level risk governance logic. The Hong Kong Monetary Authority has previously disclosed that it has received 36 stablecoin license applications, and the first batch of licenses will prioritize stability and have a limited number. Among the audit standards, the requirement of 100.00% high-liquidity reserve assets is particularly critical.

In the regulatory framework, “high-liquidity reserve assets” are clearly defined—essentially equivalent to cash, short-term government bonds, and other assets that can be realized at a definite price in a very short period of time. This requirement is in stark contrast to the practice of some jurisdictions allowing “algorithmic structures” or riskier reserve allocations. A deeper institutional design lies in the bankruptcy isolation mechanism of third-party custody. Hong Kong law’s recognition of trust arrangements makes the “real sale” of reserve assets legally enforceable. This means that even in the event of the issuer’s bankruptcy, stablecoin holders’ claims on reserve assets will take precedence over the issuer’s ordinary creditors.

It is worth noting that the requirement of “clear and implementable payment scenarios” may become a de facto business access threshold in practice. It forces applicants to answer a fundamental question: What real transaction needs does your stablecoin solve?

Unlike the path of pursuing expanded usage, Hong Kong’s stablecoin framework is closer to a “regulated narrow bank liability.” Its goal is not market share in the short term, but to ensure that it can still smoothly connect with the entire fiat currency system in extreme situations. This design inevitably sacrifices a certain degree of innovation speed, but in exchange for the certainty that can be accepted by institutional balance sheets.

III. The challenge of liquidity: How can Hong Kong “activate” the digital asset market?

The Hong Kong Securities and Futures Commission (SFC) released the ASPIRe roadmap for virtual asset market regulation in February 2025, proposing five pillars: connection, protection, products, infrastructure, and relationships. Recently, the SFC held the third Digital Asset Advisory Group meeting, focusing on improving the liquidity of licensed platforms and expanding product and service types.

Why is Hong Kong now so eager to solve the liquidity problem? Behind this urgency is the real challenge faced by the Hong Kong virtual asset market in the past two years: strict compliance requirements and limited market depth have formed a difficult negative cycle to break. High compliance costs limit the number of participants, a single product type is difficult to attract diverse funds, and insufficient transaction depth further hinders the substantive participation of institutions. This “hollowing out” risk is a side effect of institutional design that Hong Kong regulators must face.

In November 2025, the SFC issued a circular allowing licensed virtual asset trading platforms to integrate liquidity with internal group platforms through shared order books. This seemingly technical adjustment actually reflects a subtle change in regulatory logic: from insisting on “complete formal isolation” to pursuing “substantial market availability.”

Allowing internal shared order books means that regulators are beginning to face a reality—under a strictly isolated institutional design, Hong Kong licensed platforms cannot form sufficient transaction depth. This adjustment is not a reduction in regulatory standards, but an active repair of the real friction in the early institutional design.

Hong Kong is promoting the establishment of a complete virtual asset regulatory system covering four major areas: trading, custody, investment advisory, and asset management. According to the plan, the Financial Services and the Treasury Bureau and the SFC plan to submit relevant draft regulations to the Legislative Council in 2026. The goal of this system is to build a complete value chain from issuance to trading, from the primary market to the secondary market, for more diverse, more complex, especially RWA-related security tokens in the future.

IV. Dual-engine drive: How do stablecoins and trading markets serve the real economy?

Combining Hong Kong’s stablecoin infrastructure with market expansion measures, an ecological closed-loop picture serving complex digital assets such as RWA is being constructed. However, the logic of this closed loop needs to be examined more carefully.

The core role of stablecoins in the RWA ecosystem is indeed far more than just payment. When real-world assets are tokenized, the resulting cash flow distribution, interest payments, and automated clearing links all require a regulated, programmable medium with stable fiat currency value. A compliant Hong Kong dollar stablecoin can indeed become this “settlement layer” tool.

The cutting-edge exploration of the Japanese financial community provides a reference for this. The “Project Trinity” project, jointly initiated by mainstream financial institutions such as Sumitomo Mitsui Banking Corporation and Daiwa Securities, aims to use stablecoins to achieve “delivery versus payment” cross-chain atomic settlement of security tokens. The project plans to eventually achieve near 24/7 real-time settlement, bringing traditional secondary market infrastructure into a new era.

However, it should be clearly pointed out that stablecoins can only solve the “currency and clearing” problem of RWA, but cannot replace the legal confirmation of underlying assets, information disclosure, and default disposal mechanisms. In other words, it improves transaction efficiency, but not the credit quality of the assets themselves. The biggest uncertainty of RWA is not at the settlement level, but on three more basic issues: First, the legal enforceability of asset authenticity and ownership; second, the conflict between bankruptcy procedures and creditor priority in cross-jurisdictional situations; and third, whether the secondary market pricing is distorted in the absence of historical data.

The combination of stablecoins and trading markets is indeed weaving a complete network from fiat currency entry to asset exit. But for a company that wants to tokenize the revenue rights of its commercial real estate, the most valuable part of the solution provided by Hong Kong is compliance certainty, not technological breakthroughs.

V. New opportunities and new test questions: Hong Kong under mainland policies

Hong Kong’s strategic path is clear, but the challenges are equally real. The actual market application effect after the issuance of the first batch of stablecoin licenses will be a key observation point to test whether this infrastructure can be successful.

Hong Kong local banks seem to have an advantage in the competition for the first batch of licenses, but it remains to be seen whether they can design stablecoin products that are truly internationally competitive. The success of stablecoins lies not only in compliance, but also in their network effects and the expansion of actual application scenarios—this is particularly challenging given the limited size of the Hong Kong local market.

Policy coordination and execution efficiency between different regulatory agencies will also affect the speed of ecological development. An efficient and consistent regulatory environment is crucial to attracting complex multinational financial businesses, but this requires a high degree of tacit understanding between the Hong Kong Monetary Authority, the SFC, and other departments in operational details.

Particular attention should be paid to the signals released by mainland regulatory policies recently. In early February 2026, the People’s Bank of China, the China Securities Regulatory Commission, and other eight ministries and commissions issued new regulations, which reiterated the strict prohibition of domestic virtual currency business activities, and for the first time formulated clear regulatory guidelines for “real-world asset tokenization.” According to the analysis of Zheshang Securities, the new regulations divide the activities of domestic entities going to overseas markets to carry out RWA business into foreign debt, asset securitization, equity and other types, and clarify the corresponding regulatory processes.

This means that as long as they comply with the regulations and pass the record, the path for high-quality mainland assets to conduct compliant financing in overseas markets in the form of RWA has been systematically opened up. However, a clear “misreading valve” needs to be established here: the record system is not equal to automatic release, and individual case review is not equal to channelized arrangements. More accurately, the new regulations do not open a channel for large-scale asset outflows, but provide a path that can be understood and tracked by regulators for a few projects with clear asset structures, compliant entities, and real financing needs.

This brings unique opportunities to Hong Kong, but a more accurate role positioning should be a “compliance buffer zone” rather than a “regulatory vacuum zone.” Hong Kong may become a prudent interface connecting mainland physical assets with international digital capital, but how to ensure the compliance and risk control of cross-border capital flows and avoid becoming a channel for regulatory arbitrage will be a long-term issue faced jointly by Hong Kong and mainland regulatory agencies.

As the global digital finance competition enters the deep-water zone, Hong Kong’s choice reflects a fundamental bet on institutional certainty. The linkage between stablecoin licenses and the security token market is a preliminary manifestation of this path.

The real test in the future lies in: Can this institutional design that prioritizes certainty generate sufficient market vitality while maintaining safety? When the first real estate revenue token based on a compliant Hong Kong dollar stablecoin completes issuance and clearing, what people will see is not only a technical verification, but also a stress test of institutional feasibility.

Hong Kong is trying to play a role that requires extremely high balancing skills in this financial transformation—it is both an innovation test site and a risk filter; it is both an international interface and a compliance barrier. The choice of this road is clearly visible, but whether it can ultimately be successful still depends on the precise execution of countless institutional details and the pragmatic co-construction of all parties in the market.

Article source of some materials: · “John Lee: Hong Kong plans to issue stablecoin licenses next month” · “Hong Kong Securities Regulatory Commission holds consultation meeting: intends to improve the liquidity of licensed platforms and expand product services” Author: Liang Yu Editor: Zhao Yidan