Hong Kong plans to expand regulated stablecoin settlement for tokenized funds while accelerating the broader use of digital assets across its financial markets. The measures, laid out in the city's 2026 Policy Address, span stablecoin payments, tokenized investment products, digital bond issuance, and digital asset custody.

As part of the initiative, the government will also test the tokenization of more than HK$1.3 trillion in Exchange Fund Bills by year-end.

Hong Kong Expands Stablecoin Settlement Framework

According to a public document cited by WuBlock on Thursday, the 2026 Policy Address directs regulators to support regulated stablecoin trading on licensed virtual asset platforms. It also proposes using stablecoins to settle tokenized money market funds, which hold short-term, high-liquidity debt instruments. Stablecoins are digital tokens designed to maintain a stable value against a reference asset, and tokenization converts fund shares into digital units recorded on a blockchain.

Under the plan, the Securities and Futures Commission (SFC) will refine virtual asset licensing rules and establish clearer compliance requirements for service providers. Regulators will additionally strengthen rules covering tokenized investment products and issuance.

The framework could extend stablecoin settlement beyond trading into traditional investment products. It would connect regulated digital currencies with tokenized funds and other blockchain-based financial instruments, placing payment and the underlying asset records on the same regulated infrastructure.

Hong Kong has already developed regulated stablecoin infrastructure through its issuer licensing framework. Earlier this year, the city granted its first stablecoin issuer licenses, creating a regulatory foundation for broader institutional applications.

The policy direction also supports tokenized gold and other suitable real-world assets on licensed platforms. As a result, stablecoin settlement could become part of a broader digital market infrastructure rather than a standalone payment use case.

Tokenization Tests Target HK$1.3 Trillion in Assets

The Hong Kong Monetary Authority (HKMA) will test the tokenization of more than HK$1.3 trillion worth of Exchange Fund Bills — short-term Hong Kong dollar debt instruments issued by the HKMA — by the end of 2026. The initiative aims to help banks use these assets more efficiently around the clock rather than only during standard settlement hours.

The government also plans to regularize digital bond issuance — debt securities issued and recorded in digital form — and explore digital currencies for settlement, dividend payments, and redemption. These measures could extend stablecoin settlement and other digital payment methods across multiple stages of the asset lifecycle.

At the infrastructure level, the HKMA targets central bank digital currency (CBDC) settlement and 24/7 operations under EnsembleTX around the end of this year. The authority will also continue exploring applications for tokenized deposits.

Hong Kong reported that digital bonds issued between 2025 and the first half of 2026 represented nearly 50% of the global market. The latest measures therefore build on existing tokenization activity rather than introducing an entirely new direction.

Separately, the SFC will begin operating a digital asset custody surveillance system during the second half of 2026. Its broader market and anti-money-laundering surveillance components are scheduled to follow in 2027.

Overall, Hong Kong is linking stablecoin settlement, tokenized assets, and digital bond infrastructure within a single regulated financial-market framework.

Source: Live Bitcoin News