The release of Hong Kong’s second Digital Asset Policy Statement marks a pivotal moment in the city’s financial evolution. As global attention turns toward blockchain and Web3 innovation, Hong Kong is positioning itself at the forefront of digital finance transformation. With strong institutional support and a growing ecosystem, the city is exploring new pathways beyond traditional IPOs — most notably, the rise of Initial Coin Offerings (ICOs) as a complementary fundraising mechanism for blockchain-driven ventures.
This shift isn't just technological — it's strategic. By embracing ICOs, tokenization, decentralized identity, and real-world asset (RWA) integration, Hong Kong aims to strengthen its status as a global financial hub in the digital age.
What Are ICOs and Why Do They Matter?
An Initial Coin Offering (ICO) is a fundraising method used by blockchain projects to raise capital by issuing digital tokens. Similar in concept to an IPO, but built on decentralized infrastructure, ICOs allow startups to sell utility or governance tokens to early investors in exchange for cryptocurrencies like Bitcoin or Ethereum.
These tokens often grant users access to future services, participation in platform governance, or revenue-sharing rights. For investors, they represent both speculative opportunity and functional value within emerging ecosystems.
Hong Kong’s Securities and Futures Commission (SFC) has established clear guidelines for virtual asset platforms, ensuring compliance and investor protection. According to regulatory guidance cited by HashKey, platforms must conduct thorough due diligence before listing any token — evaluating factors such as market maturity, liquidity history, team credibility, technical robustness, and legal compliance.
Notably, non-security tokens must have operated on a blockchain for at least 12 months before being considered for listing — a rule designed to filter out speculative or underdeveloped projects.
Building a Full-Service Web3 Ecosystem
Animoca Brands, a key player in the Web3 space, exemplifies this integrated approach. Under the leadership of President Omar Little (欧阳杞浚), the company offers end-to-end advisory services — from project incubation and tokenomics design to exchange listing and post-launch liquidity management.
One of its flagship initiatives, Mocaverse, leverages zero-knowledge proof (ZKP) technology to create a decentralized identity passport. This empowers users with full control over their personal data and digital assets, breaking away from centralized tech giants’ data monopolies.
Omar emphasizes that successful token launches go beyond technical execution — they require compelling narrative crafting. In 2024’s bullish market cycle, many teams rushed to list tokens within weeks. However, without sufficient trading volume or sustained community interest, even well-funded projects failed to gain traction.
"Timing and storytelling are everything," Omar notes. "A great project needs more than just code — it needs momentum, clarity, and alignment with market cycles."
Post-Listing: The Real Work Begins
Many assume that once a token is listed on an exchange, the job is done. But according to industry experts, post-listing liquidity management is where long-term success is determined.
Market volatility can lead to sharp price swings — especially when trading volume is thin. The recent crash of the OM token highlighted systemic risks tied to poor liquidity and centralized exchange risk controls.
Animoca Brands avoids short-term “get-rich-quick” projects. Instead, it partners with teams focused on sustainable growth, offering strategic support through every phase — including active market-making when necessary. Over time, the company brought these functions in-house after recognizing the importance of controlling quality and consistency.
With diversified operations across investment, development, and advisory services, Animoca has increased predictability in returns — turning market volatility into structured income opportunities rather than gambling outcomes.
Tokenization: Unlocking Real-World Value
Beyond crypto-native tokens lies a broader frontier: real-world asset (RWA) tokenization. At HashKey Tokenisation, CEO Linda Liu (刘佳) explains that tokenization involves representing off-chain assets — like bonds, real estate, or commodities — as tradable digital tokens on a blockchain.
"Theoretically, almost any asset can be tokenized," she says. "But feasibility depends on three key dimensions: practicality, necessity, and implementation structure."
Common models include:
- Ownership tokenization: Tokens represent legal ownership of physical assets.
- Revenue-right tokenization: Tokens entitle holders to a share of future cash flows — similar to equity dividends or royalty payments.
While blockchain doesn’t inherently boost liquidity, it dramatically expands distribution channels. A traditionally illiquid asset may remain hard to trade — but tokenization allows fractional ownership and access to global investors who were previously excluded.
For example, HashKey launched the world’s first tokenized money market ETF, enabling investors to participate with as little as $1 USD (or HKD). This democratizes access to high-quality financial products while maintaining regulatory compliance and operational security.
Green Finance Meets Blockchain Innovation
Tokenization also opens doors in green finance. By digitizing green bonds or carbon credits, governments and institutions can efficiently raise capital for environmental initiatives such as clean energy, carbon reduction, and sustainable infrastructure.
Hong Kong’s green bond program could benefit significantly from blockchain-based issuance — enhancing transparency, auditability, and cross-border investor participation.
However, Liu cautions against “greenwashing.” True impact comes from tangible economic value, not marketing buzzwords. Challenges remain in standardizing carbon metrics across jurisdictions and aligning issuer-investor expectations.
Bridging TradFi and DeFi: The Role of Stablecoins and ETFs
As bridges between traditional finance (TradFi) and decentralized finance (DeFi), two innovations stand out: crypto ETFs and regulated stablecoins.
Bitcoin ETFs have already proven transformative — offering institutional investors regulated exposure to digital assets without custody risks. With more ETF types expected in 2025, including Ethereum and multi-asset offerings, mainstream capital inflows into crypto are accelerating.
Meanwhile, Animoca Brands’ collaboration with Standard Chartered and HKT on a regulated Hong Kong dollar stablecoin underscores the need for trusted fiat-backed digital currencies. Unlike unregulated stablecoins, a government-supervised HKD stablecoin would ensure transparency, stability, and widespread adoption across DeFi applications.
Such infrastructure is essential for enabling seamless cross-border payments, trade settlements, and 24/7 financial services — all critical components of a modernized financial system.
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Frequently Asked Questions (FAQ)
Q: What’s the difference between an IPO and an ICO?
A: An IPO involves selling shares in a company via regulated stock exchanges, granting equity ownership. An ICO sells digital tokens that may provide utility or governance rights within a blockchain platform — typically with less regulatory oversight but higher risk.
Q: Are ICOs legal in Hong Kong?
A: Yes, but under strict regulation. The SFC requires rigorous due diligence for token listings, especially for security-like tokens. Platforms must ensure compliance with anti-money laundering (AML) rules and investor suitability standards.
Q: Can real estate really be tokenized?
A: Absolutely. Real estate tokenization allows fractional ownership of properties. Investors can buy small portions of high-value assets — improving accessibility and liquidity in traditionally illiquid markets.
Q: Is RWA tokenization safe?
A: When conducted under proper legal frameworks and custodial safeguards, yes. The key is linking on-chain tokens to verified off-chain assets through transparent audits and smart contract enforcement.
Q: Why does Hong Kong need a local stablecoin?
A: A regulated HKD stablecoin strengthens financial sovereignty, supports local Web3 innovation, and provides a reliable settlement layer for digital transactions — both domestically and internationally.
Q: How do ETFs help the crypto market?
A: Crypto ETFs bring institutional credibility, reduce entry barriers for retail investors, and increase market liquidity — all while operating within existing financial regulations.
The Road Ahead: A Dual-Track Financial Future
Hong Kong stands at a crossroads — one path leads deeper into traditional finance; the other opens toward a hybrid future where IPOs coexist with ICOs, real assets meet digital ledgers, and privacy-enhancing technologies empower individuals.
To fully realize this vision, continued regulatory clarity, technological innovation, and ecosystem collaboration will be essential. But with strong foundations already in place — from policy support to pioneering use cases — Hong Kong is well-positioned to become a leading nexus for digital finance in Asia and beyond.
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