Hong Kong's financial authorities have outlined a 10-year strategy aimed at expanding the tokenization of real world assets (RWA) and solidifying Hong Kong's digital financial infrastructure, signaling structural changes to the way capital markets operate in the coming years.
The Financial Services Development Council (FSDC) has detailed this strategy in a concept paper titled Hong Kong Capital Markets Leadership Strategy, which frames tokenized finance as a core element of the market's future architecture. The report says that while RWA-related products could begin to emerge within the next two to five years, broader system upgrades for tokenized issuance, trading, and settlement are envisioned over a 10-year period.
FSDC reports focus more on infrastructure development than standalone products. Planned components include a tokenization platform, smart contract framework, and real-time payment system designed to support digital issuance and post-trade processes.
Hong Kong will enter this stage on a large scale. With assets under management reaching HK$35.1 trillion by the end of 2024, the city continues to rank as one of the world's leading international financial centers and global IPO venue. However, the council notes that competitive pressures are intensifying as other hubs accelerate their own digital market efforts and issuer profiles evolve towards pre-profit and innovation-driven companies.
Existing infrastructure and cross-border links
The strategy highlights Hong Kong's existing market strengths, including the Connect scheme, which provides two-way access between mainland China and global investors. While core infrastructure such as the Central Moneymarkets Unit (CMU) is said to meet international standards, the legal and regulatory framework remains internationally consistent and predictable.
Professional services capabilities across banking, wealth management, legal and accounting departments were also cited as key pillars to support future market adaptation.
Step-by-step roadmap for market development
To structure implementation, FSDC outlines a step-by-step schedule. In the short term, spanning six to 24 months, possible measures include improving listing channels for pre-profit and IP-intensive companies, strengthening post-listing support, inviting re-listings and dual primary listings, and conducting controlled pilots of new products.
In the medium term, 2 to 5 years, the focus will shift to expanding the ecosystem. This could include expanding the Connect scheme beyond stocks and fixed income, developing private asset platforms, mobilizing long-term capital through high-grade fixed income and sustainable finance, and introducing tokenized real assets supported by blockchain-enabled workflows.
Over the long term, over five to 10 years, the council envisions scaling up tokenization-enabled issuance, expanding offshore RMB and bond markets, and fully evolving Hong Kong into a multi-asset, multi-currency capital formation hub.
FSDC said advancing these efforts in an orderly manner is aimed at strengthening market competitiveness, supporting the financing of the real economy, and strengthening Hong Kong's role in the global financial system as its digital financial infrastructure matures.
Related: Citi builds regulated custodial service track for 2026 as RWA tokenization expands
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