Hong Kong issues rules for asset tokenization as interest mounts

The Securities and Futures Commission (SFC) of Hong Kong has issued two circulars to regulate digital asset tokenization.

The circulars 

Conversations about tokenization have recently surged, and the SFC noted a heightened interest from financial institutions in tokenizing traditional financial instruments within global financial markets.

The regulatory body clarified that it has been reviewing different suggestions regarding tokenizing investment products, including those related to the primary offering and secondary trading of tokenized products on SFC-licensed virtual asset trading platforms. It added:

“The SFC sees the potential benefits of tokenization to the financial markets, particularly in increasing efficiency, enhancing transparency, reducing settlement time and lowering costs for traditional finance, but it is also aware of the new risks arising from using this technology.” 

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