In his 2026-27 Budget Speech, Hong Kong Financial Secretary Paul Chan stated that Hong Kong will issue the first batch of licenses to issuers of fiat-pegged stablecoins in March. The relevant licensing framework has already been established, and regulators will assist licensed issuers in exploring diverse application scenarios within a compliant and risk-controlled framework. The Budget also confirmed that Hong Kong will introduce legislation this year to establish a licensing regime for virtual asset dealers and custodian service providers. The scope of regulation will be expanded from the current trading platforms and stablecoins to include digital asset trading activities such as over-the-counter (OTC) transactions. Liquidity has been identified as a key regulatory priority for this year. The Financial Secretary noted that the SFC will take measures to enhance liquidity in the local crypto-asset market and open up more products to professional investors, including previously proposed arrangements for margin financing and derivatives trading of crypto-assets, while establishing an “accelerator” mechanism to drive market innovation. Regarding asset tokenization, the Hong Kong government will issue guidelines clarifying that corporate creditor registers may be maintained via blockchain and will explore the use of electronic signatures in tokenized bond issuances. The Hong Kong Monetary Authority (HKMA) will also continue to upgrade its wholesale central bank digital currency (wCBDC) pilot platform, EnsembleTX, to strengthen 24/7 real-value settlement and cross-border interoperability standards. Furthermore, Hong Kong plans to amend the Inland Revenue Ordinance over the next two years to implement the OECD’s Crypto-Asset Reporting Framework (CARF) and the updated Common Reporting Standard (CRS), aligning with emerging global tax transparency rules for crypto-assets.