April. Spot Bitcoin and Ethereum ETFs approved
The Hong Kong Securities and Futures Commission’s official website officially announced the list of approved virtual asset spot ETFs, including products from China Asset Management (Hong Kong), Harvest Global, and Bosera International. This is also the first time such products have been launched in the Asian market, and Ethereum spot ETF products will be the first in the world.
June. License application controversy
On May 31, 2023, the SFC issued the VATP License Manual and the Circular on Transitional Arrangements for the Licensing System, requiring virtual asset exchanges operating in Hong Kong at the time to obtain a license issued by the regulatory authorities by the end of the one-year transition period.
By the end of May 2024, many platforms had actively submitted license applications. However, some mainstream trading platforms such as OKX, Huobi HK, and Gate HK withdrew their applications for compliance licensing in Hong Kong, which once caused confusion among everyone about the prospects of Hong Kongs virtual asset market.
July. JD.com enters Hong Kong stablecoin market
On July 18, 2024, the Hong Kong Monetary Authority (HKMA) released the list of participants in the stablecoin regulatory sandbox, with JD.com, Yuanbi, and Standard Chartered becoming the first batch of participating companies.
On July 24, JD CoinChain Technology (Hong Kong) announced that it will issue a cryptocurrency stablecoin in Hong Kong that is pegged to the Hong Kong dollar at a 1:1 ratio. As a subsidiary of JD Technology Group, JD CoinChain is the only potential stablecoin issuer under JD. The stablecoin is issued based on a public chain, and its reserves are composed of highly liquid and credible assets, which are deposited in independent accounts of licensed financial institutions, and the integrity of the reserves is verified through regular disclosures and audit reports. JD said it will cooperate with global regulators and comply with relevant laws and regulatory standards.
August. The Hong Kong Monetary Authority launched the Ensemble project sandbox to support the development of the tokenized market
On August 28, 2024, the Hong Kong Monetary Authority (HKMA) launched the Ensemble Project Sandbox to promote the application of tokenization technology in the financial sector. The first phase of the trial covers four major themes: fixed income and investment funds, liquidity management, green finance, and trade supply chain financing.
The HKMA has completed the construction of the sandbox and is working with banks to prepare for cross-bank payment and currency settlement experiments. The SFC will work with the HKMA to promote the development of the tokenized asset market, enhance Hong Kongs innovative position in the global financial market, and plan to cooperate with international institutions to promote the development of global tokenization technology.
October. Wong Tin-yau becomes Chairman of the Hong Kong Securities and Futures Commission
The Chief Executive of the Hong Kong Special Administrative Region has appointed Dr. Wong Tin-yau as Chairman of the SFC in accordance with the Securities and Futures Ordinance for a three-year term from October 20, 2024 to October 19, 2027.
We must seize opportunities and embrace challenges to foster a sustainable and vibrant capital market that protects the interests of investors while promoting economic growth, improving corporate governance and stimulating innovation, he said.
Hong Kongs third virtual asset exchange approved
On October 4, 2024, the Hong Kong Securities and Futures Commission updated the list of Virtual Asset Trading Platforms (VATP) and issued Type 1 (Securities Trading) and Type 7 (Automated Trading) licenses to the Hong Kong Virtual Asset Exchange (HKVAX), in compliance with the requirements of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
HKVAX provides over-the-counter trading, trading platforms and custody services, focusing on security tokens (STO) and real asset tokenization (RWA), and promoting the development of Hong Kongs fintech ecosystem. The CEO said that STO and RWA will increase asset liquidity and create more financing and investment opportunities. The company is also building a strong infrastructure to support its own and partner businesses, and plans to provide end-to-end solutions covering tokenization, issuance, trading and custody, and jointly build a digital asset alliance with strategic partners to improve industry standards.
November. HKEX officially launches virtual asset index series on 2024-11-15
The virtual asset index series provides transparent and reliable benchmark prices for Bitcoin and Ethereum in the Asian time zone, supporting Hong Kongs position as Asias leading digital asset hub. The index series will address price differences between virtual assets on global exchanges and provide investors with a unified reference price.
This series will comply with the EU Benchmark Regulation (BMR) and will be jointly managed by a UK-registered authority and CCData. The launch of the HKEX is in response to the Hong Kong governments policy to promote the development of virtual assets, aiming to promote the development of Hong Kongs financial technology and provide investors with important benchmark tools to help the healthy development of the virtual asset market.
ZhongAn Bank launches cryptocurrency trading service
On November 25, Hong Kong digital bank ZA Bank announced that it has become the first bank in Asia to provide cryptocurrency trading services to retail users, supporting Bitcoin and Ethereum transactions. Users can use Hong Kong dollars and US dollars to trade through the ZA Bank App, with a minimum transaction amount of US$70 or HK$600. New users are free of commission for the first three months. This service is limited to Hong Kong ID card holders.
December. The Stablecoin Draft Bill was released
The Stablecoin Bill was submitted to the Legislative Council for its first reading on December 18. The bill stipulates that activities that issue fiat stablecoins, Hong Kong dollar stablecoins, or promote stablecoins to the public require a license. Regulatory priorities include the sound management of reserve assets, the protection of redemption rights for holders, and the fight against money laundering.
Four new licensed exchanges
On December 18, the Hong Kong Securities and Futures Commission announced that it had recently issued licenses to four virtual asset trading platforms, bringing the number of licensed virtual asset trading platforms in Hong Kong to seven. The four platforms include Cloud Account Greater Bay Area Technology (Hong Kong), DFX Labs, Hong Kong Digital Asset Trading Group, and Thousand Whales Technology. These platforms will obtain licenses through a fast-track licensing process. At the same time, the Securities and Futures Commission is accelerating the approval process for virtual asset platforms and has developed a clear licensing process roadmap, with plans to set up an advisory group in early 2025 to strengthen supervision of virtual asset platforms.
Hong Kong Legislative Council member Wu Jiezhuang proposed the launch of Digital Pass
On December 31, Hong Kong Legislative Council member Wu Jiezhuang proposed the launch of Digital Pass, allowing mainland investors to buy and sell Hong Kong-approved digital assets through a special channel to promote financial connectivity between the mainland and Hong Kong and promote financial innovation and the development of new quality productivity.
Wu Jiezhuang pointed out that although cryptocurrency trading is prohibited in the mainland, cryptocurrency trading in Hong Kong is legal under the one country, two systems framework and may provide opportunities for mainland residents to invest in Hong Kong virtual assets. He believes that whether such investment is allowed will depend on changes in the international situation, and the mainland may adjust relevant policies in a timely manner according to development needs.
