Hong Kong’s position as a world leader in digital assets

Regulatory developments and market innovation pave the way for digital assets in Hong Kong.

3 February 2026

5 mins

Corporate & investment bankingDigital solutionsFinancing, Securities Services & Custody

With ongoing regulation and a strong institutional push, Hong Kong is positioning itself as a trusted digital asset hub for global markets, laying the groundwork for increased adoption and investment.

Despite geopolitical tensions and trade-related uncertainty, industry stakeholders and investors are optimistic about Hong Kong’s ability to help pave the way for the global adoption of digital assets at scale. What sets it apart is a series of steps to develop a comprehensive, principles-based regulatory framework aimed at creating a secure and investor-friendly digital assets ecosystem.

Making milestones in the digital assets development journey

A large part of that optimism stems from regulatory developments. Following the passage of the Genius Act and the Clarity Act in the United States – which have helped reduce uncertainty around legislating digital assets such as stablecoins – Hong Kong has introduced measured steps to encourage innovation while safeguarding investors.

For instance, the Securities & Futures Commission has published a framework for trading digital assets while actively engaging with investors to raise awareness of the asset class and to support broader participation.

Meanwhile, the market capitalisation of crypto ETFs have increased in both numbers and inflows recently, with an example of this being Blackrock’s IBIT which is now over USD90 billion in just two years, noted Sabina Chiang, Head of Managed Investments, Wealth & Retail Banking, Standard Chartered.

“Regulators in Hong Kong are taking a very measured approach on digital assets, focusing on building a trusted ecosystem, providing access and ensuring sufficient investor protection to instill the confidence needed to drive wider adoption,” Chiang said.

Banks key to catalysing mass-market adoption

By spearheading innovation while addressing the risks that typically accompany new technologies, banks like Standard Chartered are helping to support the development of a digital asset ecosystem and to drive broader adoption.

The first step towards scaling up adoption beyond institutional investors and high net worth individuals is to focus on innovations that help decentralised finance (DeFi) products such as stablecoins deliver practical improvements over traditional finance (TradFi) instruments. Key advantages include seamless user experience, faster settlements, increased efficiencies, improved liquidity and enhanced security.

As TradFi and DeFi continue to converge within Hong Kong’s evolving regulatory framework, Standard Chartered is playing a central role in building a bridge between the old and the new paradigms. Key initiatives include:

• Providing clients with crypto ETF access via its wealth and retail platform.
• Becoming the first institution in Asia Pacific to support a tokenised money market fund, in partnership with China Asset Management (Hong Kong) Limited.
• Offering digital asset custodial services in the United Arab Emirates and Luxembourg, with plans to soon bring these capabilities to Hong Kong.

Areas to watch in digital assets

Several upcoming trends are emerging as key areas to watch out for in Hong Kong, with stablecoins and payments at the forefront. A payments ecosystem that accepts stablecoins at scale would be a major step in supporting wider adoption.

Tokenisation of real-world assets is seen as a potentially significant area that could unlock significant investor interest and fund flows for the city’s wealth managers. Beyond tokenised money market funds that have already launched in Hong Kong, regulators are encouraging banks to conduct live tokenisation transactions between such products and other forms of tokenised money, including tokenised deposits.

The Hong Kong government was the first in the world to issue a tokenised green bond back in February 2023. Fast forward to October 2025 and over 70 per cent of family offices in Hong Kong have either invested in, or are considering, investing in cryptocurrencies. With renewed focus, there is scope for future government issued tokenised assets like bonds.

Another source of investment flows to digital assets could be a move by retirement savings plans, such as the 401(k) in the US, to diversify their TradFi portfolios. Further down the road, there could be a shift to “blockchain-native funds,” which would exclusively maintain investment records on-chain to reduce costs and enhance security.

The insurance industry is seeing early developments in crypto-only life insurance products that allow clients to pay premiums and receive payouts in cryptocurrency. They are also working on solutions to protect the holders of digital assets and offer new avenues for wealth accumulation.

Continued stakeholder collaboration is the key to success

Hong Kong’s digital assets ecosystem has evolved significantly in a relatively short time, reflecting the efforts of stakeholders across banks, fintechs and regulators. It is now positioned to extend this progress into the next phase, defined by institutional-grade custody, tokenised products, and a payments infrastructure that balances innovation with risk management.

“The progress we’ve seen is the result of building layers of market infrastructure together – regulators, banks, fintechs and ecosystem partners. Standard Chartered is committed to advancing this in a measured, responsible way that balances innovation with risk management, while bringing more participants into Hong Kong’s growing digital asset ecosystem.”

– Allan Song, Head of Data & Digital, Financing & Securities Services, Standard Chartered.