Review of Major Events in the Hong Kong Virtual Asset Sector in 2024

Spot Bitcoin and Ethereum ETFs Approved

In April 2024, the Hong Kong Securities and Futures Commission's official website announced the approved list of virtual asset spot ETFs, including related products from institutions such as Huaxia (Hong Kong), Harvest International, and Bosera International. This is the first time such products have been launched in the Asian market, with the Ether spot ETF being among the first in the world.

The Controversy of Virtual Asset Exchange License Applications

By the end of May 2024, several platforms submitted applications for the Virtual Asset Trading Platform (VATP) license. However, some mainstream trading platforms withdrew their compliance license applications in Hong Kong, raising concerns in the market about the future of virtual assets in Hong Kong.

JD.com Enters the Hong Kong Stablecoin Market

On July 18, 2024, the Hong Kong Monetary Authority published the list of participants in the regulatory sandbox for stablecoins, and JD.com became one of the first participating companies. Subsequently, JD Coin Chain Technology (Hong Kong) announced that it would issue a cryptocurrency stablecoin pegged 1:1 to the Hong Kong dollar. This stablecoin is issued based on a public chain, with reserves consisting of highly liquid and credible assets.

Hong Kong Monetary Authority Launches Ensemble Project Sandbox

On August 28, 2024, the Hong Kong Monetary Authority launched the Ensemble project sandbox, aimed at promoting the application of tokenization technology in the financial sector. The first phase of the experiment covers four main themes: fixed income and investment funds, liquidity management, green finance, and trade supply chain financing.

Huang Tianyou appointed as Chairman of the Hong Kong Securities and Futures Commission

On October 20, 2024, Dr. Huang Tianyou was appointed as the Chairman of the Hong Kong Securities and Futures Commission for a term of three years. He emphasized his commitment to nurturing a sustainable and vibrant capital market that protects investors' interests while promoting economic growth, enhancing corporate governance, and stimulating innovation.

Approval Status of Virtual Asset Exchanges in Hong Kong

On October 4, 2024, the Hong Kong Securities and Futures Commission issued Type 1 and Type 7 licenses to the Hong Kong Virtual Asset Exchange (HKVAX). HKVAX focuses on Security Token Offerings (STO) and Real-World Asset (RWA) tokenization, aiming to enhance asset liquidity and create more financing and investment opportunities.

On December 18, the Hong Kong Securities and Futures Commission announced the issuance of licenses to four more virtual asset trading platforms, bringing the total number of licensed platforms to seven. These four platforms include Cloud Account Greater Bay Area Technology (Hong Kong), DFX Labs, Hong Kong Digital Asset Trading Group, and Thousand Whales Technology.

Hong Kong Stock Exchange Launches Virtual Asset Index Series

On November 15, 2024, the Hong Kong Stock Exchange officially launched a virtual asset index series, providing transparent and reliable benchmark prices for Bitcoin and Ethereum in the Asian time zone. This index series will address the price discrepancies of virtual assets across global exchanges, offering investors a unified reference price.

ZhongAn Bank Launches Cryptocurrency Trading Services

On November 25, 2024, Hong Kong digital bank ZA Bank became the first bank in Asia to offer cryptocurrency trading services to retail users, supporting Bitcoin and Ethereum transactions. Users can trade using Hong Kong dollars and US dollars through the ZA Bank App, with a minimum transaction amount of $70 or 600 HKD.

Release of the Stablecoin Regulation Draft

On December 18, 2024, the "Stablecoin Regulation Draft" was submitted to the Legislative Council for its first reading. The draft stipulates that activities related to issuing fiat stablecoins, Hong Kong dollar stablecoins, or promoting stablecoins to the public require a license. Regulatory focus includes management of reserve assets, protection of holders' redemption rights, and measures to combat money laundering.

Proposal to Launch "Digital Pass"

On December 31, 2024, Hong Kong Legislative Council member Wu Jietzhuang proposed the launch of "Digital Connect", allowing mainland investors to trade Hong Kong-recognized digital assets through a special channel. This proposal aims to promote financial connectivity between the mainland and Hong Kong, encouraging financial innovation and the development of new productive forces.