New Hong Kong Framework to Allow Secondary Trading of Tokenized Products

_{Photo credit: leungchopan / Shutterstock.com}

Hong Kong’s Securities and Futures Commission (SFC) has unveiled a new regulatory framework to pilot secondary trading of tokenized investment products as part of the city’s continued push to expand its digital asset infrastructure.

Announced in a circular published on April 20, the framework will principally focus on enabling secondary trading of tokenized SFC-authorized open-ended funds on licensed virtual asset trading platforms. 

The regulator says the framework is designed to broaden access to regulated digital asset markets, while also allowing the SFC to consider over-the-counter trading arrangements on a case-by-case basis.

The new framework builds on earlier tokenization guidance issued in 2023, which saw rapid market growth. According to the SFC, 13 tokenized investment products were available to the public in Hong Kong as of March 2026, with assets under management in tokenized classes rising roughly sevenfold from the previous year to HKD10.7 billion (approx. USD 136 million).

A key feature of the pilot is the potential for round-the-clock trading, supported by regulated stablecoins and tokenized deposits. To address risks associated with liquidity and investor protections, the framework introduces safeguards covering fair pricing, orderly trading, liquidity provisions, and disclosure requirements.

SFC CEO Julia Leung said:

Our new framework marks another major milestone on Hong Kong’s journey to build out a fully integrated, innovative and scalable digital asset ecosystem with robust investor safeguards. This initiative allows a traditional securities product, once tokenised, to be traded in the evening and on weekends, and supported by the use of regulated stablecoins and tokenised deposits to facilitate round-the-clock liquidity.

The first products are expected to center on tokenized money market funds, with the regulator set to review outcomes before expanding the scope to other products.