Hong Kong Chief Executive’s Policy Unit convened a digital finance forum to examine how Hong Kong can contribute to China’s ambition to become a financial powerhouse by advancing digital finance applications, balancing regulation with development, and strengthening coordination with mainland digital finance infrastructure.
The forum brought together key players from both local and mainland digital finance sectors, including researchers from the Research Institute of the People’s Bank of China, members of Task Force on Promoting Web3 Development, and former Hong Kong Monetary Authority chief Norman Chan Tak-lam.
The forum focused on three key areas, including promoting digital finance applications in Hong Kong, maintaining a balance between regulatory oversight and industry development, and strengthening coordination with mainland digital finance infrastructure.
Hong Kong can serve as a firewall, a testbed, and a connector between China and global markets in digital finance, supporting the country’s push to become a financial powerhouse under its 15th Five-Year Plan, said Stephen Wong Yuen-shan, head of the policy unit.
The city could lead in pilot projects involving digital currencies such as central bank digital currencies, stablecoins, tokenized deposits, cross-border payments in digital yuan, and fintech regulatory sandboxes, he added, helping to build practical experience for national digital finance innovation.
This came after China’s securities regulator last week tightened oversight of offshore issuance of tokenised asset-backed securities linked to onshore assets.
The global digital asset market carries both significant innovation potential and risks, offering new opportunities for upgrading financial services while also posing regulatory challenges, the participants said at the forum.
Norman Chan noted that cryptocurrencies are neither the only form of encryption nor true money, highlighting that assets such as Bitcoin lack the attributes of traditional currency and require oversight for anti-money laundering and investor protection.
Participants said Hong Kong’s strength lies in creating a trusted environment that allows innovation to flourish. The city has established, or is in the process of establishing, a robust regulatory framework that sets clear rules for market participants while also providing sandbox mechanisms to allow experimentation and controlled testing of new financial technologies, they said.
