On 7 April 2025, Ms. Christina Choi, Executive Director of Investment Products at the Hong Kong Securities and Futures Commission (HK SFC), delivered a keynote address titled “Fuelling the Web3 and Digital Asset Ecosystem in Hong Kong” at the Hong Kong Web3 Festival. The speech marks a pivotal moment in articulating the regulator’s evolving vision for the region’s digital asset future, firmly anchored in pragmatism, regulatory clarity, and investor protection.
In her opening remarks, Ms. Choi used a poignant anecdote involving a floppy disk mistaken as a 3D-printed “save button” by her son to illustrate the exponential pace of technological change, a prelude to emphasising the promise and disruption of Web3. Framing blockchain as the new technological frontier akin to the floppy disk’s transformation of data portability, Ms. Choi affirmed that the HK SFC views Web3 not as a fleeting trend, but as a foundational shift in the financial landscape.
Ms. Choi reaffirmed that the HK SFC, in alignment with the Hong Kong Government’s overarching vision, is committed to building a sustainable and globally competitive Web3 ecosystem. This vision, she explained, is grounded not in speculative hype but in strategic regulation and infrastructure development. The Commission’s dual focus lies on virtual asset (VA) exchange-traded funds (ETFs) and tokenization, two pillars it sees as vital to institutionalising digital finance.
Elaborating on Hong Kong’s leadership in regulated digital investment, Ms. Choi highlighted the jurisdiction’s milestone achievement in becoming the first in Asia to launch VA spot ETFs in April 2024. She noted that Hong Kong currently stands as the largest VA ETF market in the Asia-Pacific region. What sets the HK SFC apart, she added, is its robust regulatory framework mandating licensure of all actors across the VA value chain: fund managers, custodians, and trading platforms.
A development announced during her address, was the HK SFC’s decision to permit staking services for VA spot ETFs through licensed platforms. Ms. Choi clarified that while staking enhances returns for investors by allowing assets to support blockchain protocols, the HK SFC will enforce specific safeguards, including mandated custody and caps on staked proportions.
Transitioning to tokenisation, Ms. Choi described it as the natural complement to VA ETFs and enabling traditional and real-world assets to be digitised on blockchain infrastructure. She referenced the HK SFC’s 2023 circulars which laid the regulatory groundwork for tokenising a variety of instruments including notes, bonds, and even gold. She reported early success in the form of retail tokenised funds, including three new money market funds, the largest debut of its kind among them.
Ms. Choi also discussed the HKMA’s “Project Ensemble,” describing it as an innovation sandbox for tokenised money, with the HK SFC co-leading pilots in asset management. She stated that integrating tokenised money into product trading is key to shortening settlement cycles and enhancing fund flows, with insights from ongoing experiments already proving valuable.
While the HK SFC is optimistic about expanding into secondary market trading of tokenised assets, Ms. Choi reiterated the HKSFC’s core stance: investor protection is paramount. Keeping in mind the complexity of this next phase, such as unresolved challenges around custody, liquidity, pricing, and order matching in decentralised markets, and affirmed that the HK SFC will proceed with deliberation, ensuring safeguards evolve alongside innovation.
Concluding her address, Ms. Choi answered the inevitable question: “Why Hong Kong?” Reaffirming the city’s strengths, its common law foundation, financial resilience, and regional centrality, she positioned Hong Kong as the natural choice for Web3 development. She referenced the Government’s forthcoming VA Policy Statement 2.0, the HKMA’s digital currency explorations, and the HK SFC’s recent “A-S-P-I-Re” roadmap (Access, Safeguards, Products, Infrastructure, Relationships) as concrete manifestations of coordinated institutional commitment.
In closing, Ms. Choi reflected on the convergence of traditional finance and digital innovation, urging all stakeholders to collaboratively pursue the path from “zero to one hundred.” Her remarks not only reflect the HK SFC’s position as a forward-thinking regulator. This speech can be taken as the way forward of the HK SFC’s regulatory philosophy: innovation is welcome, but only when tempered with discipline, structure, and investor safeguards.
(Source: https://www.sfc.hk/-/media/EN/files/COM/Speech/Web3-speech-final.pdf?rev=-1&hash=67A04B3006E9CF73014C3905EF83C57F, https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=25PR48)
