Hong Kong Treasury Bureau: "Stablecoin Regulations" officially implemented in August last year, Hong Kong Monetary Authority is now processing related license applications.

Hong Kong Financial Secretary Xu Zhengyu attended a policy briefing session of the Legislative Council Finance Committee today (January 30) and stated that 2026 is the year when the national "Fifteenth Five-Year Plan" begins. The Hong Kong Treasury will continue to adhere to the spirit of innovation and reform, actively align with national development strategies, and consolidate and enhance Hong Kong's advantages as an international financial center. The "Stablecoin Ordinance" was officially implemented in August last year, establishing a licensing system for fiat stablecoin issuers in Hong Kong. The Hong Kong Monetary Authority is currently processing related license applications. In addition, Xu Zhengyu mentioned that the Hong Kong Treasury and the Securities and Futures Commission issued legislative proposals in December last year regarding the establishment of a regulatory framework for virtual asset trading and custody service providers. They jointly released a consultation summary and are currently formulating detailed regulatory frameworks. The Hong Kong Treasury and the Securities and Futures Commission are also seeking further public consultation on the regulatory framework for service providers offering advice on virtual assets and virtual asset management services, with the goal of submitting draft regulations to the Legislative Council for the four aforementioned service providers this year. First, in terms of consolidating its position as an international financial center: (a) Continuing to strengthen the stock market: The Hong Kong stock market remained strong last year. The Hong Kong Treasury will continue to implement multiple measures to enhance the listing mechanism and operation of the stock market, including assisting mainland tech companies in financing in Hong Kong through the "Tech Connect" program; improving the main board listing and structured product issuance mechanisms; optimizing the listing rules for dual-class shares; exploring the possibility of shortening the stock settlement cycle from T+2 to T+1; promoting more overseas companies to conduct secondary listings in Hong Kong and assisting mainland companies listed in Hong Kong to return as their preferred listing destination. (b) Strengthening its position as an international asset and wealth management center: The Hong Kong Treasury will strive to submit legislative proposals for further optimizing the tax regime for funds, single family offices, and associated entities in the first half of this year. The Hong Kong Treasury also plans to submit amendment bills to the Legislative Council this year for the introduction of mandatory acquisition and arrangements or compromise-related statutory regimes for real estate investment trusts, which will facilitate privatization and corporate restructuring of such funds in a clear and orderly manner. (c) Strengthening its position as an international risk management center: To facilitate insurance funds' participation in infrastructure financing, the Hong Kong Treasury will amend legislation this year to lower the capital requirements for infrastructure investment and provide targeted support for local projects. The Hong Kong Treasury will continue to promote the development of captive and reinsurance industries. In addition, the industry announced the establishment of an independent shipping risk pool operating on a commercial model in November last year, expected to start providing protection for Hong Kong and mainland vessels this year. (d) Building a leading international bond market: The Securities and Futures Commission and the Hong Kong Monetary Authority announced the "Roadmap for Fixed Income and Currency Market Development" last year, strategically positioning Hong Kong as a global center for fixed income and currency and proposing key measures around four pillars. The Securities and Futures Commission initiated a feasibility study in December last year to explore the feasibility of developing an electronic platform for trading fixed income and currency products in Hong Kong. (e) Deepening "connectivity": The Hong Kong Treasury will continue to discuss with mainland relevant institutions the implementation of offshore RMB sovereign bond futures in Hong Kong and the expansion of interest rate derivative products under the mutual market access scheme. The Hong Kong Treasury will strive to submit amendment bills to the Legislative Council in the first half of this year to implement a new arrangement for stamp duty on RMB counter stock transactions. (f) Continuing to enhance the accounting profession: The Hong Kong Treasury will continue to promote the development of the accounting profession and is currently discussing long-term financial modeling proposals with the Financial Reporting Council (FRC). Second, in accelerating the development of new growth points, the Hong Kong Treasury will: (a) Accelerate the establishment of an international gold trading market and promote commodity trading: The Hong Kong Treasury has set a target of expanding the gold storage capacity in Hong Kong by over 2000 tons within three years to make Hong Kong a regional hub for gold reserves. It is promoting gold traders to establish or expand refining plants in Hong Kong and has signed a memorandum of cooperation with the Shenzhen Local Financial Supervision Bureau to support Hong Kong gold traders in using gold refining facilities established in Shenzhen through processing and trade cooperation, refining gold for trading and delivery purposes in Hong Kong. The Hong Kong Treasury will vigorously promote cooperation in the Shanghai-Hong Kong gold market and signed a cooperation agreement with the Shanghai Gold Exchange at the ASIA FINANCIAL forum earlier this week to jointly participate and expand China's share and price influence in the international gold market. The Treasury has established a government-owned company as the governing body of the Hong Kong Gold Central Clearing System, with the goal of commencing trial operations of the clearing system this year. In terms of commodity trading, there are currently 15 warehouses recognized by the London Metal Exchange operating in Hong Kong. The Hong Kong Treasury will support the industry in establishing more accredited warehouses. The Hong Kong Exchanges and Clearing Limited (HKEX) will deepen its connectivity with the Guangzhou Futures Exchange and other mainland commodity markets. The "Commodity Strategy Committee" led by the Financial Secretary held its first meeting in December last year, bringing together industry representatives to strengthen the top-level design of commodity policies. (b) Promoting the sustainable development of financial technology: The "Stablecoin Ordinance" was officially implemented in August last year, establishing a licensing system for fiat stablecoin issuers in Hong Kong. The Hong Kong Monetary Authority is currently processing related license applications. In addition, the Hong Kong Treasury and the Securities and Futures Commission issued legislative proposals in December last year regarding the establishment of a regulatory framework for virtual asset trading and custody service providers. They jointly released a consultation summary and are currently formulating detailed regulatory frameworks. The Hong Kong Treasury and the Securities and Futures Commission are also seeking further public consultation on the regulatory framework for service providers offering advice on virtual assets and virtual asset management services, with the goal of submitting draft regulations to the Legislative Council for the four aforementioned service providers this year. The Hong Kong Treasury will submit legislative proposals to the Legislative Council this year to implement the OECD's framework for reporting digital assets and common reporting standards, with the aim of exchanging tax information related to digital asset transactions with other tax jurisdictions from 2028 onwards, in line with international efforts to combat cross-border tax evasion. The Hong Kong Treasury is currently collecting public feedback on the legislative proposals. (c) Advancing green sustainable financial development: In terms of sustainable verification, the FRC launched a three-month public consultation on proposals for a local regulatory framework in December last year. The consultation results are expected to be announced in the second half of this year, with the FRC taking into account the views of stakeholders to formulate a credible and practical regulatory framework. In terms of carbon market development, the HKEX will continue to enhance its cooperation with the Greater Bay Area carbon market. The Hong Kong Treasury will also collaborate with mainland regulatory authorities to study China's participation in international carbon markets. Third, the Hong Kong Treasury will drive "bringing in" and "going out," deepening international exchanges and cooperation, including: (a) Attracting businesses and funds to Hong Kong: The response to the company relocation mechanism has been very positive since its implementation in mid-May last year. As of late January this year, 14 relocation applications have been approved, and the Companies Registry is processing the remaining nearly 20 applications. The Hong Kong Treasury will continue to promote externally and provide support. The Hong Kong Treasury will continue to promote the Hong Kong platform to emerging market issuers and funds, encourage more overseas companies to conduct secondary listings in Hong Kong, and facilitate more asset managers to issue products locally for convenient deployment in the Hong Kong market. (b) Facilitating investment attraction: The Hong Kong government has established the Industry and Investment Attraction Policy Supervisory Committee led by the Financial Secretary to research appropriate incentive policies to attract high-value-added industries and high-potential enterprises to settle in Hong Kong. The Treasury is studying appropriate tax incentive schemes and more flexible mechanisms to formulate tax incentives. (c) Playing a role as a "going out" platform: The Hong Kong Treasury is actively attracting more mainland and overseas companies to establish financial centers in Hong Kong and is currently studying measures to optimize related tax relief measures. (d) Deepening international exchanges and cooperation: Hong Kong will host the Asia-Pacific Economic Cooperation Finance Ministers' Meeting for the first time in October this year. The Hong Kong Treasury will leverage Hong Kong's strengths as an international financial center to showcase Hong Kong's all-round development in economics and finance to the international community, demonstrating Hong Kong's role as a "super connector" and "super value-added person" and better integrating and serving the national development agenda. In November last year, the Asian Infrastructure Investment Bank (AIIB) announced plans to establish an office in Hong Kong. The Hong Kong Treasury is cooperating with the AIIB to provide necessary support. The Hong Kong Treasury will continue to hold financial events, including the just-concluded ASIA FINANCIAL forum, the "Yuzhong Hong Kong" summit, and promote Hong Kong's advantages through visits. In support of the local economy, the Hong Kong Treasury will allocate an additional HKD 30 billion in basic infrastructure project expenditure over the next two to three years to support the local construction industry; reduce water charges, sewage charges, industrial and commercial wastewater surcharges for non-residential users, and exempt multiple licensing fees for one year. Finally, in terms of benefiting people's livelihoods: (a) Reforming the Mandatory Provident Fund (MPF) system: The Hong Kong government, together with the Mandatory Provident Fund Schemes Authority, will continue to arrange for the remaining Trillions of MPF plans to transition to the MPF e-platform and ensure that the platform is robust, reliable, secure, and user-friendly. The legislative work to provide a legal basis for the first phase of the Trillions of MPF's "full portability" program was completed last year and is expected to be implemented this year. Preparations for the next phase of the program have commenced, with the goal of consulting the Finance Committee in the fourth quarter of this year and submitting amendment bills to the Legislative Council in the first half of next year. (b) Strengthening regulation of licensed money lenders: Another issue related to people's livelihoods is how the Hong Kong Treasury intends to strengthen the regulation of licensed money lenders. Public consultation was completed last year, and the Hong Kong Treasury will release a consultation summary in March this year. The Hong Kong Treasury will consider the feedback collected to finalize relevant measures. (c) Encouraging childbirth: The Hong Kong government is drafting an amendment bill to extend the time for claiming an additional child allowance from one year to two years. The Hong Kong Treasury plans to submit the relevant bill to the Legislative Council for consideration in the first half of this year.