Hong Kong has made remarkable progress in the realm of cryptocurrency and security token offerings (STOs), outpacing financial centers like Singapore and the United States. HKbitEX, a key player in the crypto exchange industry, noted that unlike other regions where licenses are limited to either cryptocurrencies or STOs, Hong Kong’s comprehensive licensing encompasses both.
Lu Tingkuang, co-founder and chief strategy officer of HKbitEX, highlighted the efficiency of Hong Kong’s licensing system. This dual capability streamlines operations for platforms like HKbitEX, offering a wider range of services compared to counterparts such as Coinbase in the U.S., which are limited to cryptocurrency transactions only.
### Integration of Traditional Securities and Blockchain Technology
Blockchain technology has transformed traditional financial systems, introducing new products based on smart contracts and regulated under securities laws. STOs are gaining traction for corporate financing, merging the issuance, custody, and settlement of traditional securities like stocks and bonds with blockchain technology.
Hong Kong’s market for tokenized securities is growing rapidly. Notable 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%. Earlier this year, Hong Kong also issued digital green bonds, raising approximately HK$6 billion from global institutional investors.
Revolutionary changes are happening in the private sector, especially in real estate financing. Last year, Taiji Capital introduced real estate fund security tokens aimed at professional investors. GF Securities (Hong Kong) also successfully issued tokenized securities linked to short-term commercial paper. Furthermore, the Hong Kong Securities and Futures Commission (SFC) has announced plans to open STO investments to retail investors, a move expected to draw more financial technology talent and investment to the region.
