The stablecoin landscape in Hong Kong is heating up as financial institutions, particularly asset management subsidiaries of major mainland fund houses, accelerate their entry into the digital asset ecosystem. With new regulatory frameworks rolling out and key market players securing critical licenses, the stage is set for a transformative shift in how traditional finance integrates with blockchain-based innovations.
Recent developments have sparked strong investor interest. Notably, Guotai Junan International received approval from the Securities and Futures Commission (SFC) of Hong Kong to upgrade its securities trading license, enabling it to offer virtual asset trading services—including Bitcoin and stablecoins—on its platform. This move triggered a surge in related stocks and fueled momentum across fintech-themed ETFs.
Behind the scenes, public fund subsidiaries based in Hong Kong are actively engaging in stablecoin sandbox trials, product design, and preparation for issuing tokenized financial products. Their efforts reflect a broader strategic push to align with Hong Kong’s evolving digital finance roadmap.
Regulatory Catalysts Driving Adoption
A pivotal moment arrived on May 21, when Hong Kong’s Legislative Council passed the Stablecoin Ordinance Bill, set to take effect August 1, 2025. The new framework introduces a licensing regime for issuers of fiat-collateralized stablecoins, enhancing regulatory clarity and investor protection.
This legislative advancement has encouraged both financial institutions and tech giants to deepen their involvement. Ant International and JD Binance Technology (Hong Kong) have already announced stablecoin initiatives. Circular Coin Innovation Technology, for example, is preparing to launch HKDR—a Hong Kong dollar-pegged stablecoin—prominently featured on its website as “coming soon,” with a 1:1 value parity to the HKD.
Stablecoins, by definition, are cryptocurrencies designed to maintain price stability by being backed by reserves such as fiat currency, gold, or U.S. Treasuries. As regulatory scrutiny increases, leading stablecoin issuers now publish monthly attestation reports and ensure full asset custody compliance—key steps toward institutional-grade trustworthiness.
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Pioneering Roles in Sandbox Testing and Tokenization
Before formal licensing rules were finalized, several fund subsidiaries had already begun testing infrastructure within government-backed innovation sandboxes. These controlled environments allow firms to experiment with real-world applications under supervision.
Among the most active participants is China Asset Management (Hong Kong), which has joined multiple initiatives led by the Hong Kong Monetary Authority (HKMA), including:
- Stablecoin Sandbox: Exploring issuance, redemption, and payment use cases.
- Project Ensemble: A HKMA-led effort to develop tokenized market infrastructure.
- e-HKD+ Pilot: Testing integration scenarios for the digital Hong Kong dollar.
Through partnerships with global institutions like HSBC, Visa, and ANZ Bank, China Asset Management successfully completed end-to-end trials involving on-chain payments, tokenized fund transactions, and cross-border settlement workflows.
“We’re preparing to integrate compliant stablecoins into our fund operations,” said Alvin Chu, Head of Digital Assets and Family Office at China Asset Management (Hong Kong). “Once regulations are fully implemented, we aim to enable investors to subscribe to and redeem funds using approved stablecoins. This could significantly boost our asset management scale.”
Expanding Product Frontiers with Tokenized Funds
The groundwork laid in recent years has already yielded tangible results. In April 2024, six spot virtual asset ETFs launched in Hong Kong, marking a milestone for institutional crypto access. These included:
- Bosera Bitcoin ETF and Bosera Ethereum ETF
- ChinaAMC Bitcoin ETF and ChinaAMC Ethereum ETF
- Harvest Bitcoin ETF and Harvest Ethereum ETF
These ETFs hold physical Bitcoin and Ethereum directly and support both cash and in-kind subscriptions—allowing investors to exchange crypto holdings for ETF shares. They are accessible through licensed Hong Kong brokers, bridging traditional capital markets with digital assets.
China Asset Management (Hong Kong) emphasized its early-mover advantage: having entered the digital asset space two years prior, it launched Asia's first spot crypto ETFs in April 2024. Then in February 2025, it introduced Hong Kong’s first retail tokenized money market fund—also recognized as Asia’s inaugural retail-level Real World Asset (RWA) fund.
This innovation brings tangible benefits: fractional ownership, faster settlement, and 24/7 liquidity—all while maintaining regulatory compliance. The firm plans to expand this product line further, aiming to list tokenized funds on regulated secondary markets.
Similarly, Bosera Fund Management (International) received SFC approval in March 2025 for a tokenized money market ETF solution developed in collaboration with HashKey Group, supporting both HKD and USD-denominated assets.
Talent Race Heats Up in Digital Finance
As competition intensifies, so does the demand for specialized talent. Fund managers are now aggressively recruiting professionals with expertise in blockchain, decentralized finance (DeFi), and regulatory technology.
Bosera recently posted a job opening for a Virtual Asset Product Manager, seeking candidates with at least three years of experience in virtual assets, fintech, or blockchain-related fields. Key responsibilities include:
- Designing and launching virtual asset products
- Managing full product lifecycle operations
- Integrating traditional financial instruments with stablecoins and digital currencies
- Researching global market trends and regulatory developments
- Building comprehensive product architectures covering investment, custody, clearing, payment, and yield distribution systems
China Asset Management (Hong Kong) revealed that during its 2024 ETF rollout, it established a dedicated digital assets team comprising product developers, investment managers, operations specialists, and compliance officers—forming a holistic operational structure ready for scaling.
Looking ahead, the firm intends to explore settlements using digital currencies such as stablecoins and the e-HKD, aiming to enhance transaction efficiency on-chain and contribute to Hong Kong’s vision of becoming a leading global hub for digital finance.
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Frequently Asked Questions (FAQ)
Q: What is a stablecoin?
A: A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to an underlying asset, typically a fiat currency like the U.S. dollar or Hong Kong dollar. It combines the speed and accessibility of digital assets with reduced volatility.
Q: Why are fund companies entering the stablecoin space?
A: Stablecoins offer faster settlements, lower transaction costs, and seamless integration with blockchain-based financial products. For fund managers, they enable innovative solutions like instant redemptions and tokenized fund shares.
Q: Are stablecoins regulated in Hong Kong?
A: Yes. Starting August 1, 2025, Hong Kong will implement a formal licensing regime for fiat-backed stablecoin issuers under the new Stablecoin Ordinance Bill, ensuring transparency and consumer protection.
Q: What are tokenized funds?
A: Tokenized funds represent traditional financial assets—like money market instruments—converted into digital tokens on a blockchain. This allows for fractional ownership, improved liquidity, and automated processes via smart contracts.
Q: Can retail investors participate in these new products?
A: Yes. Several offerings, including China Asset Management’s tokenized money market fund, are specifically designed for retail investors and available through regulated platforms.
Q: How do stablecoins impact traditional investing?
A: They streamline processes like fund subscriptions and redemptions, reduce reliance on intermediaries, and open doors to programmable finance—where payments and compliance can be automated using code.
With strong regulatory support, active industry participation, and growing investor demand, Hong Kong is positioning itself at the forefront of the global stablecoin revolution. As more institutions embrace this shift, the convergence of traditional finance and decentralized technology promises to redefine how value moves in the modern economy.