Hong Kong Financial Secretary: Digital assets promote the upgrading of traditional financial business

Paul Chan, Financial Secretary of the Hong Kong Special Administrative Region, stated that market participants' interest in the digital assets sector continues to heat up. Both the crypto market and stablecoins will continue to attract traffic in the future. To this end, Hong Kong will continue to position itself as an important hub connecting Crypto and TradFi, attracting players from both sides to deploy here.  

According to GovHK, Paul Chan has served as Financial Secretary since 2017. He was formerly President of the Hong Kong Institute of Certified Public Accountants, Legislative Council Member, Chairman of the Legal Aid Services Council, and Secretary for Development.  

Chan addressed multiple financial topics, including digital assets, in a blog published on Sunday. He wrote that Hong Kong has "made significant progress" in the field of digital finance.  

Moreover, the vigorous development of digital assets has also boosted the business growth of traditional financial institutions. The total transaction volume of digital asset transactions by local banks reached HK$17.2 billion (approximately US$2.19 billion) in 2024, while the custodial assets at the end of the year amounted to HK$5.1 billion (approximately US$650 million).  

Dating back to the end of 2022, Hong Kong first issued a policy declaration on the development of the digital asset market. Since then, the crypto ecosystem has rapidly taken off, attracting a large number of related enterprises to settle in Hong Kong and continue to expand.

Source: SFC Hong Kong  

Paul Chan pointed out that 10 digital asset trading platforms have successfully obtained licenses, and applications from another 8 platforms are currently being reviewed by the Securities and Futures Commission (SFC).  

Notably, the Hong Kong government is preparing to release a second policy declaration. Chan stated that this move aims to "respond to the latest market trends and changing circumstances."  

The Hong Kong government said that stablecoin legislation will be passed soon, and relevant compliance licenses will be established for over-the-counter (OTC) transactions and custody businesses. Licensed spot ETFs will be allowed to provide staking services, and new legislative...  

— Wu Blockchain (@WuBlockchain) April 7, 2025  

Additionally, Chan said the government is accelerating the development of regulatory frameworks for custody and over-the-counter (OTC) trading.  

He emphasized that product innovation is key, as it serves as an effective means to "create market demand, enhance liquidity, and drive industry upgrading."  

**Hong Kong: Growing Market Players Eye Stablecoin Sector**  

The Hong Kong Legislative Council has passed the *Stablecoin Ordinance*, which will come into effect on August 1. The ordinance focuses on establishing a licensing regime for stablecoin issuers. Chan stated that Hong Kong is "steadily and prudently promoting stablecoin development, providing a new paradigm for the global stablecoin market."  

He noted that attention and market demand for the stablecoin sector will continue to rise in the future. The global total market capitalization of stablecoins currently reaches $251.7 billion, while annual stablecoin trading volume in 2024 surged to $27.6 trillion.  

*Source: DeFiLlama*  

According to Chan, fiat-pegged stablecoins combine the security and efficiency of blockchain with the stability of legal tender, and are expected to become a "potential tool connecting the financial system with the real economy," capable of reducing costs and improving efficiency.  

He pointed out that stablecoins can serve as infrastructure for innovative solutions and the decentralized payment medium, no longer constrained by the time and location limitations of traditional payments.  

Chan wrote, "We have noticed significant attention from numerous market players. After the ordinance takes effect, the Hong Kong Monetary Authority (HKMA) will expedite the processing of relevant license applications to enable eligible projects to operate smoothly, bringing new opportunities to Hong Kong's real economy and financial services."  

*Source: fso.gov.hk (Official Website of the Hong Kong Financial Services and the Treasury Bureau)*  

Chan emphasized that Hong Kong has adopted a more open regulatory model for stablecoins, allowing licensed issuers to freely choose different fiat currencies to peg their stablecoins based on business needs. This flexible framework will attract more global institutions to issue coins in Hong Kong, further enhancing the liquidity of related trading activities and the international competitiveness of Hong Kong's market.  

He concluded, "In this era of both opportunities and challenges, we must seize the initiative, comprehensively strengthen Hong Kong's competitiveness, and continuously optimize the business environment."  

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