Hong Kong to review DLT laws for digital asset expansion
The Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) concluded the first phase of a review on distributed ledger technology (DLT) adoption. They announced plans for a legislative review to boost DLT use in fixed income and digital assets.
Legal clarity for tokenised bonds
The first phase of the review, conducted by the FSTB and HKMA with industry feedback, confirmed Hong Kong's legal and regulatory environment is flexible enough for tokenised bond issuances.
This flexibility has been demonstrated by three government issuances and a growing number of corporate tokenised bonds from Asian and Middle Eastern issuers.
To provide further certainty, the Companies Registry (CR) has issued Frequently Asked Questions (FAQs) affirming that DLT-maintained debenture registers fulfill Companies Ordinance record-keeping requirements.
This initial step aims to clarify legal issues and facilitate market adoption of DLT applications in the fixed income sector, building on Hong Kong's established track record in digital bond innovation.
Paving the way for digital assets
The FSTB and HKMA will launch the next phase of the review in the second half of this year.
This phase will explore necessary legislative changes and flexibilities to build a future-ready ecosystem for broader DLT use in fixed income and digital assets.
It will specifically examine legal enhancements for DLT adoption in current market processes and concepts for a more digitally native setting.
Christopher Hui, Secretary for Financial Services and the Treasury, highlighted the review as a "critical step forward" for Web3 development.
HKMA Chief Executive Eddie Yue noted Hong Kong's leadership, citing the November 2025 digital bond, aiming for a "robust and forward-looking fixed income ecosystem".