Hong Kong Plans Stablecoin Settlement for Tokenized Funds

• Hong Kong plans regulated stablecoin settlement for tokenized money market funds.
• HKMA will test tokenization of over HK$1.3 trillion in Exchange Fund Bills.
• Hong Kong is expanding digital asset infrastructure across bonds and custody.

Hong Kong plans to expand regulated stablecoin settlement for tokenized funds while accelerating the broader use of digital assets across financial markets. The government also plans to test tokenization involving 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 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. 

The Securities and Futures Commission will refine virtual asset licensing rules and establish clearer compliance requirements for service providers. Meanwhile, regulators will strengthen rules covering tokenized investment products and their issuance.

The framework could expand stablecoin settlement beyond trading into traditional investment products. It would connect regulated digital currencies with tokenized funds and other blockchain-based financial instruments.

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 will test the tokenization of more than HK$1.3 trillion worth of Exchange Fund Bills by the end of 2026. The initiative aims to help banks use these assets more efficiently around the clock.

The government also plans to regularize digital bond issuance 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 asset lifecycles.

At the infrastructure level, the HKMA targets 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.

In addition, 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 for 2027.

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