The recent approval for Guotai Junan International to upgrade its securities trading license by Hong Kong's Securities and Futures Commission (SFC) has sent ripples through the financial markets. This upgrade permits the firm to offer virtual asset trading services, leading to a surge in stablecoin-related stocks and thematic ETFs focused on fintech and digital assets.
Multiple asset management firms' Hong Kong subsidiaries are actively engaging in the stablecoin ecosystem, participating in sandbox tests and preparing to design and issue virtual asset-related products. This movement follows earlier forays into digital assets, including the launch of Bitcoin ETFs, Ether ETFs, and tokenized money market funds for retail investors.
Hong Kong's Regulatory Framework and Market Response
The Stablecoin Bill passed by Hong Kong’s Legislative Council on May 21 is set to take effect on August 1, establishing a licensing regime for issuers of fiat-backed stablecoins. This regulatory clarity has encouraged traditional financial institutions and tech giants to enter the space.
For instance, Ant International and JD CoinChain Technology have already announced plans related to stablecoin development. Additionally, Round Dollar Innovative Technology prominently features its upcoming Hong Kong Dollar stablecoin (HKDR), which will be pegged 1:1 to the HKD.
Stablecoins are a type of cryptocurrency designed to maintain a stable value by pegging to assets like fiat currencies, gold, or government bonds. To enhance transparency and trust, leading stablecoin issuers now monthly publish reserve reports and hold 100% of their assets in custody.
Active Participation of Fund Management Subsidiaries
In anticipation of these regulatory developments, several Hong Kong-based subsidiaries of major fund houses have been conducting end-to-end testing of stablecoin-related processes. For example, China Asset Management (Hong Kong) has participated in multiple sandbox initiatives led by the Hong Kong government.
These include the stablecoin sandbox, Project Ensemble (a series of measures by the Hong Kong Monetary Authority to develop tokenized markets), and the e-HKD Pilot. These projects cover critical aspects such as stablecoin issuance, payment systems, asset bridging, and fund subscriptions and redemptions.
Through collaborations with the HKMA, HSBC, Visa, ANZ, and other major financial institutions, China Asset Management (Hong Kong) has completed tests on chain-based payments, tokenized fund transactions, and end-to-end capital flow processes.
"Once the SFC’s regulatory provisions are fully implemented, we plan to explore applications of funds within the stablecoin ecosystem, such as allowing investors to use compliant stablecoins for subscriptions and redemptions," said Zhu Haokang, Head of Digital Asset Management and Family Wealth at China Asset Management (Hong Kong). He added that such innovations could significantly boost assets under management.
Pioneering Digital Asset Fund Launches
Earlier, in April 2024, six virtual asset spot ETFs were listed in Hong Kong. Bosera Fund (International), China Asset Management (Hong Kong), and Harvest International issued Bitcoin and Ether ETFs, respectively. These products allow both cash and in-kind subscriptions, enabling investors to directly convert their Bitcoin or Ether into ETF shares via Hong Kong securities brokers.
China Asset Management (Hong Kong) highlighted that it entered the digital asset space two years ago. In April 2024, it launched Asia’s first batch of spot crypto asset ETFs. Then, in February 2025, it introduced a tokenized HKD money market fund—the first retail tokenized fund in Asia—bringing real-world asset (RWA) tokenization to Hong Kong’s retail market. The firm plans to continue expanding its tokenized fund offerings.
In March, Bosera Fund (International), in partnership with HashKey Group, also received SFC approval for its HKD and USD money market ETF tokenization scheme.
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Talent Acquisition and Organizational Development
The promising opportunities presented by stablecoins have led to a fierce competition for talent specializing in virtual assets. Bosera Fund (International) recently posted a job opening for a product manager focused on virtual assets. The role requires at least three years of experience in virtual assets, fintech, blockchain, mobile payments, or related financial product fields.
Responsibilities include designing and issuing virtual asset-related products, managing their full lifecycle, integrating traditional financial products with virtual assets and stablecoins, researching global market trends and regulatory policies, and building product architectures covering investment, trading, custody, and settlement.
China Asset Management (Hong Kong) has already established a digital asset division with teams covering product development, investment management, business operations, and compliance. The company aims to launch more tokenized products, facilitate secondary circulation on compliant trading platforms, and explore settlements using digital currencies like stablecoins and e-HKD to enhance transaction efficiency on the blockchain.
Frequently Asked Questions
What is a stablecoin?
A stablecoin is a type of cryptocurrency pegged to a stable asset like a fiat currency or gold. It is designed to minimize price volatility and is often used for transactions and settlements in the digital asset ecosystem.
Why are Hong Kong fund houses entering the stablecoin market?
With clear regulations and growing investor interest, Hong Kong-based fund managers see stablecoins as a way to offer innovative products, improve transaction efficiency, and tap into new sources of assets under management.
How can investors participate in tokenized funds?
Investors can typically subscribe to tokenized funds using traditional currency or compatible digital assets through licensed securities brokers or designated platforms. Some funds also allow in-kind subscriptions using cryptocurrencies.
What are the benefits of tokenized money market funds?
Tokenization can enhance liquidity, enable faster settlements, reduce intermediary costs, and provide broader access to money market instruments for retail and institutional investors.
Is investing in stablecoin-related products safe?
While regulatory frameworks are improving, investing in digital assets carries risks, including regulatory changes and market volatility. Investors should assess their risk tolerance and seek professional advice.
How is Hong Kong supporting the development of digital assets?
Hong Kong has introduced clear regulations, sandbox environments for testing, and initiatives like Project Ensemble and the e-HKD Pilot to foster innovation in digital finance and tokenized assets.
The ongoing development of Hong Kong’s stablecoin ecosystem and the active involvement of established financial institutions signal a significant shift toward the integration of traditional and digital finance. This trend is likely to continue as regulatory frameworks mature and market participants innovate.