Digital Assets Could Double Hong Kong’s Fund Management Industry, New Report Finds
Tokenisation and regulated digital finance seen as major growth drivers for Asia’s leading asset management hub
Digital money and asset tokenisation could double the size of Hong Kong’s fund management industry, according to a newly released report that highlights the city’s ambition to position itself at the forefront of regulated digital finance.
The analysis suggests that the integration of digital assets into traditional investment products could significantly expand assets under management by attracting new capital and improving market efficiency.
The report argues that Hong Kong’s established legal framework, deep capital markets and close connectivity to mainland China place it in a strong position to benefit from the rapid development of digital finance.
By enabling the tokenisation of funds, bonds and other financial instruments, digital money is expected to lower transaction costs, improve liquidity and broaden investor access, particularly among younger and international investors.
Industry participants cited in the report say regulatory clarity has been a critical factor.
Hong Kong authorities have rolled out licensing regimes and guidance for virtual asset platforms, fund managers and custodians, creating what proponents describe as a stable and credible environment for innovation.
This approach is seen as differentiating Hong Kong from other jurisdictions where regulatory uncertainty has slowed adoption.
The report also notes that tokenised funds could unlock efficiencies across the fund value chain, from settlement and custody to reporting and compliance.
These gains, combined with the potential to distribute products digitally across borders, are expected to make Hong Kong-based funds more competitive globally and to draw inflows from both institutional and retail investors.
Looking ahead, the study concludes that sustained collaboration between regulators, financial institutions and technology providers will be essential to realise the full potential of digital money.
If implemented at scale, the report says, digital assets could become a core pillar of Hong Kong’s financial sector growth and reinforce the city’s status as a leading international asset management centre.
The analysis suggests that the integration of digital assets into traditional investment products could significantly expand assets under management by attracting new capital and improving market efficiency.
The report argues that Hong Kong’s established legal framework, deep capital markets and close connectivity to mainland China place it in a strong position to benefit from the rapid development of digital finance.
By enabling the tokenisation of funds, bonds and other financial instruments, digital money is expected to lower transaction costs, improve liquidity and broaden investor access, particularly among younger and international investors.
Industry participants cited in the report say regulatory clarity has been a critical factor.
Hong Kong authorities have rolled out licensing regimes and guidance for virtual asset platforms, fund managers and custodians, creating what proponents describe as a stable and credible environment for innovation.
This approach is seen as differentiating Hong Kong from other jurisdictions where regulatory uncertainty has slowed adoption.
The report also notes that tokenised funds could unlock efficiencies across the fund value chain, from settlement and custody to reporting and compliance.
These gains, combined with the potential to distribute products digitally across borders, are expected to make Hong Kong-based funds more competitive globally and to draw inflows from both institutional and retail investors.
Looking ahead, the study concludes that sustained collaboration between regulators, financial institutions and technology providers will be essential to realise the full potential of digital money.
If implemented at scale, the report says, digital assets could become a core pillar of Hong Kong’s financial sector growth and reinforce the city’s status as a leading international asset management centre.
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