Hong Kong officially names "digital asset"; should Taiwan follow? Looking at the opportunities and challenges for Taiwan under the Web3 wave from the "Policy Declaration 2.0".

According to Gate, with the rise of the global digital asset wave, the attitudes and regulatory frameworks of various governments towards Crypto Assets are continuously evolving. Recently, Hong Kong, with its forward-looking stance, is actively embracing the Web3 era and has released the "Hong Kong Digital Asset Development Policy Declaration 2.0" (referred to as "Policy Declaration 2.0"), among which the most noteworthy action is the official renaming of "virtual assets" to "digital assets." This move not only broadens the coverage but also conveys Hong Kong's determination to build a comprehensive and proactive digital asset ecosystem. In light of Hong Kong's active transformation, should Taiwan also reconsider the definition of "virtual assets" and think about how to find its own positioning in the global Web3 competition?

1. Renaming "digital asset": Hong Kong's strategy upgrade to embrace Web3

According to reports from Hong Kong media, with the Hong Kong government issuing the "Hong Kong Digital Asset Development Policy Declaration 2.0", the wording indicates that the official term has been formally changed from "virtual asset" to "digital asset". The industry generally believes that the term "digital asset" is more comprehensive, covering a broader range of existing financial product tokenization, and has a more positive image. Hong Kong Legislative Council member Kenneth Leung stated that the renaming allows "digital asset" to cover a wider scope and clearly articulates the policy vision and direction for the next steps.

This declaration is the next stage of development following the Hong Kong Securities and Futures Commission's release of the "ASPIRe" roadmap in February this year (which covers a new regulatory framework for virtual asset over-the-counter trading and virtual asset custody services, and will promote the expansion of virtual asset products and services). It aims to focus on enhancing the liquidity of digital asset trading, promoting a more diverse supply of digital asset products, empowering industry development, facilitating inclusive finance, and nurturing talent, thereby strengthening Hong Kong's position as a global digital asset center. The Financial Secretary of Hong Kong, Paul Chan, pointed out: "Digital assets are an important part of financial technology. The declaration demonstrates our support for innovation and, combined with robust regulation, allows the digital asset ecosystem to be closely linked with the real economy." The Secretary for Financial Services and the Treasury, Christopher Hui, added: "The new framework positions Hong Kong at the forefront of digital transformation, providing a clear roadmap for businesses and investors."

2. LEAP Framework: Building a Trustworthy Digital Asset Ecosystem

The "Policy Declaration 2.0" proposes the "LEAP" framework, aimed at forming a trustworthy, sustainable, and deeply integrated digital asset ecosystem within the real economy. The framework encompasses four core pillars:

Legal and regulatory streamlining: Hong Kong will establish a unified and comprehensive regulatory framework covering digital asset exchanges, stablecoin issuers, digital asset trading service providers, and custody service providers, with a focus on investor and consumer protection. The Securities and Futures Commission will become the main regulatory body responsible for licensing and registration matters, while the Monetary Authority will oversee banks' digital asset trading and custody activities. Hong Kong will actively adopt international standards to ensure regulation aligns with global practices. In addition, the Financial Services and the Treasury Bureau and the Monetary Authority will lead the review of the legal and regulatory framework related to tokenization, promoting further application of tokenization in Hong Kong. The Financial Services and the Treasury Bureau and the Securities and Futures Commission will conduct public consultations on the licensing mechanism for trading and custody, with details to be announced progressively.

Expanding the suite of tokenised products: Hong Kong will normalize the issuance of tokenised government bonds and encourage the market to apply tokenisation technology in different fields such as precious metals, non-ferrous metals, and renewable energy. The HKMA's Ensemble program will encourage the revenue streams of tokenised traditional financial products and real-world assets. At the same time, tokenised ETFs listed on the Hong Kong Stock Exchange will also be exempt from stamp duty and promote the inclusion of specified digital assets in the scope of profits tax exemption for funds and family investment control tools offered in private form.

Advancing use cases and cross-sectoral collaboration: Hong Kong will support stablecoins and other tokenized projects, including exploring the use of stablecoins as a payment tool. Cyberport will assist the government in building a stable reserve of professional talent and will launch a pilot funding scheme for blockchain and digital asset projects. The InvestHK will also support digital asset service providers in establishing and expanding their businesses in Hong Kong.

People and partnership development: Hong Kong will continue to encourage training and talent development in the digital asset industry, particularly in blockchain applications, artificial intelligence integration, and digital asset innovation. The government will promote strategic collaboration between universities and the industry, and strengthen the cooperation between regulatory bodies and law enforcement agencies to support the development of a transparent, secure, and resilient digital asset market.

Through the "LEAP" framework, Hong Kong hopes to promote innovation while ensuring that risks are controllable, further consolidating its position as an international financial center.

3. Stablecoin Regulation Ahead: Official Implementation on August 1, 2025

The most notable aspect of the "Policy Declaration 2.0" is the clear implementation of the regulatory framework for stablecoins. Hong Kong will implement a supervisory system for stablecoin issuers starting from August 1, 2025. This system will impose strict requirements on reserve asset management, stabilization mechanisms, redemption processes, and prudent risk management, aiming to promote the research and implementation of solutions by licensed stablecoin issuers in various application scenarios. Hong Kong welcomes market participants to propose suggestions on how to experiment with and use licensed stablecoins.

This initiative aligns with global trends. On June 26, Canadian banking regulators also stated that they are ready to regulate stablecoins, and a regulatory framework is being developed. This shows that major global economies are gradually recognizing the importance of stablecoins in the digital economy and are actively exploring their regulatory pathways.

4. Stablecoins: New Opportunities for the Internationalization of the Renminbi and Financial Innovation

Zhang Jun, Managing Director, Chief Economist, and Director of the Research Institute at China Galaxy Securities, pointed out that although the hegemony of the US dollar in the real monetary system is still hard to shake, the restructuring of rules in the blockchain field provides the possibility of "competitive replacement" for the currencies of various countries. He believes that the "digitalization of fiat currency" driven by stablecoins may become a new leap in the form of currency, especially when the tokenization of real-world assets (RWA) is on the agenda. Stablecoins issued by different collateral and different credit entities will construct a more complex financial ecology, accelerating the value connection between physical assets and digital assets.

Zhang Jun emphasized that Hong Kong has taken the lead in introducing stablecoin regulations and initiating pilot projects, sending positive signals. For the Renminbi, the layout of stablecoins is not only a proactive response to the digitalization pressure from the US dollar but also an inevitable choice in constructing an on-chain financial system during the globalization process. Under the traditional currency framework, blockchain technology provides the possibility for the internationalization of the Renminbi to "overtake on a bend"—by expanding usage scenarios through stablecoins and embedding them into the global payment network, it is expected to reshape the international currency competition landscape in the context of a century of changes.

Of course, the technical vulnerabilities of stablecoins (such as smart contract risks), collateral management (such as the volatility of pegged assets), and regulatory arbitrage risks cannot be ignored. However, historical experience shows that financial innovation is often accompanied by risk games. Only by fostering development under the premise of a sound regulatory framework and enhanced technical security can we promote the evolution of stablecoins from "barbaric growth" to "orderly evolution," injecting innovative vitality into the global financial system.

Conclusion: Should Taiwan Catch Up?

The release of the "Hong Kong Digital Asset Development Policy Declaration 2.0", especially the clarity of the stablecoin regulatory system, marks a new stage in Hong Kong's strategic layout in the field of digital assets. By optimizing regulations, expanding tokenized products, promoting application scenarios, and nurturing talent, Hong Kong is committed to creating a comprehensive, secure, and innovative digital asset ecosystem. As a bridge connecting traditional finance and the digital world, the regulated development of stablecoins in Hong Kong will not only provide fertile ground for global Web3 innovation but may also bring new opportunities for macro-financial issues such as the internationalization of the Renminbi. Hong Kong, with its unique openness and foresight, is accelerating its pace towards becoming a global digital asset center.

However, BlockTempo reports that some readers may notice that the Taiwanese authorities generally prefer to use "virtual currency" (BlockTempo tends to use "Crypto Assets"), such as the "Virtual Asset Service Act" previously announced by Taiwan's Financial Supervisory Commission. Whether the Hong Kong government's move will influence the Taiwanese authorities to also consider a name change in the future remains to be seen.

However, more pragmatically, compared to Hong Kong's proactive approach, Taiwan generally adheres to a conservative style of "first prevent risks, then talk about innovation" in financial innovation. In the rapidly changing Web3 era, while this approach can mitigate risks, it can also easily lead to missed growth opportunities. Hong Kong's "Digital Asset Development Policy Declaration 2.0" marks the acceleration of Hong Kong's embrace of blockchain and Crypto Assets, providing global players with a new gateway to enter the Asian market, and injecting more vitality into the local financial system. Finding a pace suitable for Taiwan and industrial development, and achieving a balance between risk management and innovative development, is a goal that everyone needs to work towards together.