Hong Kong Regulators Push Tokenized Assets Toward 24/7 Trading

Hong Kong's two main financial watchdogs are turning tokenization from a pilot project into plumbing. The Securities and Futures Commission and the Hong Kong Monetary Authority jointly hosted an industry seminar on November 11, drawing roughly 200 financial professionals to discuss linking tokenized funds, digital currencies and bank settlement systems. The talks landed just after two moves that let approved tokenized investment funds trade continuously and participating banks settle tokenized deposits around the clock.

SFC Executive Director of Investment Products Elisa Ng said the city has moved past early blockchain trials. “Tokenisation in Hong Kong is moving beyond experimentation towards commercialisation,” she said after the seminar, adding that the next step is wiring tokenized investment products, digital currencies and financial infrastructure together. Banks, asset managers and other firms at the seminar dug into liquidity management and the role licensed crypto trading platforms could play in getting tokenized funds in front of investors.

The foundation was laid on October 26, when the SFC approved secondary trading of publicly offered tokenized money market funds on a licensed virtual asset trading platform. Two existing products got the green light to trade continuously, letting eligible investors buy and sell fund units outside traditional market hours. The SFC capped the framework at approved money market funds for now, with rules on pricing, liquidity and disclosure, and said it will watch the market before widening the list.

On the settlement side, the HKMA upgraded its EnsembleTX infrastructure on November 2 to handle continuous interbank settlement of tokenized deposit transactions using tokenized central bank money. EnsembleTX is the pilot phase of Project Ensemble, and the regulator says participation has reached 12 banks and 20 industry pioneers. The system replaces an earlier setup that leaned on Hong Kong's real-time gross settlement rails.

Banks are already selling the service. Standard Chartered launched tokenized deposits for corporate customers in Hong Kong on November 2, using EnsembleTX to move funds between participating institutions outside standard banking hours. China Asset Management, Finloop and PantherTrade have taken part in transactions involving tokenized deposits and money market funds. HKMA Executive Director of Financial Infrastructure Nelson Chow said the infrastructure and the growing lineup of digital products give Hong Kong room to build further.

In a November 12 statement, the HKMA and SFC said they would keep working with banks and industry players on more commercial uses for tokenized deposit settlement. The HKMA has also said future Project Ensemble work will focus on expanding transaction activity and supporting more types of tokenized investment products. Hong Kong previously tested secondary trades of tokenized Exchange Fund Bills, and crypto.news has reported the city is preparing trials involving regulated stablecoins and tokenized government debt.