Despite Hong Kong’s stated ambition of developing into a digital asset trading hub, something it has been planning for three consecutive years, this goal seems a bridge to far, according to PricewaterhouseCoopers ( PwC ).

In the territory’s 2024 budget, HK$400 million ( US$51.21 million ) was ringfenced for investment in digital economy activities, including e-CNY pilot testing, data trading ecosystem development and the trial of m-Bridge programme designed to facilitate cross-border trading that involves central bank digital currencies.

In 2025, new regulations by the government were implemented to build up the digital asset ecosystem in the city. For instance, the renewed Policy Statement 2.0 on the Development of Digital Assets aims to solidify the ecosystem’s regulatory framework.

“The government’s effort is all around building regulation, so that we have safe and responsible developments in virtual assets,” shares Peter Brewin, Hong Kong digital asset leader for PwC, speaking during a press conference organized by the consultancy firm to offer insights related to the Hong Kong government’s upcoming 2025 policy address and budget.

The Stablecoins Ordinance, launched in early August of this year, formulates requirements for a fiat currency reserve, know-your-customer procedures and the real-world asset ( RWA ) tokenization. The ordinance was closely followed by the rollout of a RWA registry platform by the Hong Kong Web3.0 Standardization Association, a non-profit organization.

These regulatory actions, however, are still a far cry from what is needed to make the city a digital asset hub.

“[Blockchain native asset registries] need relevant government departments that can handle asset registry,” Brewin states. “Whether it’s around real estate, corporate interest, fund interest, intellectual property or data, we need to make sure there are avenues by which the ownership rights can be represented digitally, and this is essential for [digital asset] organizations to actually take off.”

While acknowledging that Hong Kong has the potential to develop into a strong digital wealth management venue, Brewin underscores that it lacks the holistic planning to create the trading architecture necessary to cater to the variety of different assets.

“Exchange trading needs assets to be very fungible, with deep liquidity that will ultimately make it very easy to determine market price,” he points out. “A lot of assets we talk about tokenizing can be much less liquid and lumpy, and much more non-fungible.”

An over-the-counter, auction-based market and decentralized finance solutions, he notes, are potentially more suitable for digital assets, on top of fostering secondary trading. “But questions around these requirements were not answered [by previous government measures ],” he adds. “So, we need to build that type of infrastructure up and embed digital assets into tokenized technology.”

In addition to the government-led blockchain-native asset registries, Brewin also recommends inclusive mechanisms for digital asset issuance and transference that are able to represent a range of asset ownerships for land, intellectual property and equity shareholding.