Hong Kong's 2026-27 Budget: Licensing for Stablecoin Issuers Implemented, Regular Tokenized Bond Issuance to Continue

Hong Kong's Financial Secretary, Paul Chan, announced in the 2026-27 budget that the government will table a bill within the year to establish a licensing regime for service providers involved in digital asset trading and custody.

In the bond market, to foster innovation, the government issued tokenized bonds for the third time in the fourth quarter of last year, with a total value of ten billion Hong Kong dollars, making it the largest issuance of its kind globally at the time.

Hong Kong will continue to issue tokenized bonds on a regular basis. The Hong Kong Monetary Authority will encourage more digital bond issuances in the city through its "Digital Bond Grant Scheme."

To support the application of tokenization technology in the bond market, the government will provide guidance to clarify that registers of debenture holders can be maintained using distributed ledger technology. It will also explore the use of electronic signatures for issuance documents and promote the digitalization of bearer bonds.

Hong Kong has already implemented a licensing system for fiat-referenced stablecoin issuers, with the first batch of licenses scheduled to be issued next month. The government and financial regulators will continue to encourage licensed issuers to explore more application scenarios while ensuring compliance and manageable risks.

The Securities and Futures Commission will further enhance liquidity in Hong Kong's digital asset market, providing more products and services for professional investors, with a strong emphasis on investor protection. An accelerator will also be established to speed up market innovation.