Hong Kong Doubles Down on Crypto: Third Tokenized Bond Launch & ETF Tax Breaks Signal Bullish Shift

Hong Kong cements its crypto hub ambitions with back-to-back blockchain wins.

The city just greenlit its third tokenized government bond—while slashing taxes on crypto ETFs to zero. Traders cheer; traditional finance sweats.

Tokenization tsunami continues

Another week, another digitized debt offering. The latest bond follows two successful pilots that attracted institutional whales. Blockchain settlement cuts processing time from days to minutes—banks now playing catch-up.

ETF tax relief: bait for big money

Waiving capital gains taxes on crypto ETFs isn’t just friendly—it’s strategic. Hong Kong wants that sweet institutional liquidity currently parked in BlackRock’s spot Bitcoin ETF. The message? 'We’ll pay you to ditch Wall Street.'

Cynic’s corner: Watch the fine print

Regulators giveth (tax breaks), and regulators taketh away (KYC requirements). This ‘free market’ still runs on government permission slips. But hey—progress beats perfection.

TLDR

• Hong Kong will issue its third tokenized green bond as part of its blockchain finance initiative.

• The bond will use distributed ledger technology to improve transparency and transaction speed.

• The government has announced stamp duty relief for exchange-traded funds to boost market liquidity.

• The ETF tax relief and the new bond launch are part of a coordinated financial development plan.

• The LEAP policy framework will begin on August 1 to guide digital asset regulation and growth.

Hong Kong will issue its third tokenized green bond as part of its ongoing financial modernization efforts. This MOVE comes with new stamp duty relief for exchange-traded funds (ETFs) to improve market liquidity. These combined efforts aim to strengthen the city’s position in blockchain-based finance and attract international investment.

Hong Kong Expands Blockchain Bond Strategy

The Hong Kong government will release its third tokenized green bond with a revised issuance schedule in mid-2025. This bond, which aims to increase transparency and speed in green finance transactions, continues the pattern of using distributed ledger technology established in previous offerings.

The Treasury Department continues to lead this initiative, focusing on expanding blockchain use in real-world financial products. The new bond will again feature a digital representation of traditional assets recorded securely on a blockchain. This structure allows quicker settlements and may improve liquidity for institutional and retail investors.

This issuance supports broader goals to modernize infrastructure and aligns with the city’s long-term digital finance roadmap. It will maintain Hong Kong’s strategy of combining regulatory support with technological development. Authorities expect these enhancements to create more efficient financial flows and promote wider market access.

Stamp Duty Relief Introduced for ETF Market Boost

In parallel, Hong Kong introduced stamp duty relief for ETFs to reduce trading costs and enhance investor participation. This measure supports a more active and competitive exchange-traded market in the region. Officials confirmed that the relief applies across a broad range of ETF categories.

The timing of the stamp duty relief aligns with the new tokenized bond launch, suggesting a coordinated financial development strategy. This coordinated rollout indicates a well-structured approach to stimulating investor interest. The measure also aims to build liquidity in both digital and traditional asset classes.

Market participants expect this relief to increase ETF turnover and complement the digital asset growth. The reduced costs are designed to support a more accessible investment environment.

Regulatory Framework Expands to Support Tokenization

Hong Kong will implement the LEAP digital asset policy framework starting August 1 to support digital asset development. The framework covers legal clarity, ecosystem expansion, application development, and professional talent in blockchain finance. It provides a structured foundation for stablecoin licensing and digital product oversight.

Under LEAP, regulators will manage tokenized asset-related risks through updated legal and financial structures. The Securities and Futures Commission will supervise asset dealers and custodians in this domain. Meanwhile, the Monetary Authority and Treasury Bureau will handle tokenization-linked legal responsibilities.

Alongside this, the Legislative Council approved the Stablecoins Bill to support secure digital currency issuance. Institutions can apply for licenses with the Monetary Authority by the end of 2025. Together, these steps reinforce Hong Kong’s strategic push in blockchain-based finance.