Victoria Harbour in the Hong Kong Special Administrative Region Photo: VCG

The government of the Hong Kong Special Administrative Region (HKSAR) will steadily promote the development of virtual assets (VA), after the city worked out a policy stance to build a vibrant VA sector on October 31, HKSAR Financial Secretary Paul Chan Mo-po said on Sunday. 

The policy stance clearly outlines Hong Kong's stance, as it is necessary to phase in appropriate and up-to-date regulatory support in order to properly control risks and create the prerequisites for the orderly and prosperous development of the VA market, while actively embracing innovation, Chan said in a blog post. 

Chan further noted that the policy stance has been supported by local industrial firms, while multiple enterprises have been considering expanding operations in Hong Kong or bringing businesses back to the city. 

The HKSAR government revealed its plan in an official statement in conjunction with the financial regulators to provide a facilitating environment for fostering sustainable development of the VA sector during Hong Kong Fintech Week 2022. 

The local securities and futures regulator announced on the same day that it would consider authorizing exchange-traded funds with VAs as their underlying assets. 

The policy statement has set out Hong Kong's vision and approach to develop VA industry along with related innovative technologies, applications and ecosystems, while seeking to create sound and conducive conditions through policies facilitating innovation, a comprehensive regulatory framework, and a regulatory direction based on risk management, Chan said. 

Chan noted that pilot programs, including the tokenization of green bonds, are expected to be launched before the end of 2022, marking the first tokenized government green bond in the world. 

Chan said that technological innovation should serve the real economy, and embracing innovation will bring new strength to economic development under the premise of appropriate and safe risk control, along with the realization of the potential needs to be supported by the development of technologies such as VA and the metaverse, along with the whole ecosystem.

"We need to take full advantage of the potential offered by innovative technologies, but we also need to be careful to guard against market volatility and potential risks they may cause, so as to prevent transmission of the risks and impacts to the real economy," Chan said. 

Global Times