Review of Hong Kong's Virtual Asset Development: Important Milestones in 2024

In 2024, Hong Kong made significant progress in the virtual asset sector, from improving the regulatory framework to launching innovative products, laying a solid foundation for it to become a leading digital asset hub in Asia.

Spot Bitcoin and Ethereum ETFs Approved

In April, the Hong Kong Securities and Futures Commission officially announced the approved list of virtual asset spot ETFs, including related products from several well-known asset management companies. This marks the first launch of such products in the Asian market, with the Ether spot ETF being among the first in the world.

License Application Process

In June, multiple virtual asset trading platforms actively submitted applications for the VATP license to meet regulatory requirements. Although some platforms withdrew their applications during this period, it overall reflects the market's attention to the prospects of virtual assets in Hong Kong.

New Trends in the Stablecoin Market

In July, the Hong Kong Monetary Authority announced the list of participants in the regulatory sandbox for stablecoins. A large technology company announced plans to issue a cryptocurrency stablecoin pegged to the Hong Kong dollar at a 1:1 ratio, which will inject new vitality into Hong Kong's digital currency ecosystem.

Ensemble Project Sandbox Launch

In August, the Hong Kong Monetary Authority launched the Ensemble Project Sandbox, aiming to promote the application of tokenization technology in the financial sector. The project covers multiple areas including fixed income and investment funds, liquidity management, green finance, and trade supply chain financing, demonstrating Hong Kong's determination in financial innovation.

Personnel Changes and License Issuance of Regulatory Agencies

In October, the Hong Kong Securities and Futures Commission welcomed its new chairman, demonstrating a determination to continue promoting the development and innovation of the capital markets. In the same month, the third virtual asset exchange obtained the VATP license, further enhancing Hong Kong's virtual asset trading ecosystem.

Virtual Asset Index and Retail Trading Services

In November, the Hong Kong Stock Exchange officially launched a series of virtual asset indices, providing investors with a reliable price reference. At the same time, a digital bank announced that it would offer cryptocurrency trading services to retail users, becoming the first bank in Asia to provide such services.

Stablecoin Regulation and Exchange License Expansion

In December, the "Stablecoin Regulation Draft" was submitted to the Legislative Council, establishing a clear regulatory framework for the issuance and promotion of stablecoins. In addition, the Hong Kong Securities and Futures Commission issued licenses to four new virtual asset trading platforms, bringing the total number of licensed platforms to seven, demonstrating the regulators' determination to accelerate the approval process.

Looking to the Future

As a legislative council member proposed the introduction of "Digital Pass", allowing mainland investors to trade Hong Kong-recognized digital assets through a special channel, Hong Kong's efforts to promote financial innovation and regional financial connectivity continue to advance. The developments of this year have laid the foundation for Hong Kong to consolidate its position as an international financial center and to take a leading role in the virtual asset sector.