Hong Kong has announced the launch of its third tokenized green bond, alongside a new measure to provide stamp duty relief for exchange-traded funds (ETFs). These moves form part of a broader effort to develop the city’s digital asset ecosystem and promote financial innovation through the use of distributed ledger technology.

Hong Kong Expands Tokenized Bond Strategy

Financial Secretary Christopher Hui confirmed that the city will proceed with another tokenized green bond issuance. The initiative follows two previous issues in 2023 and early 2025. This third offering will use blockchain technology to digitize green finance products and support environmentally sustainable development.

The bond will be issued by the Hong Kong Treasury Department, in coordination with the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC). These regulatory bodies will provide oversight for the issuance, ensuring compliance and transparency throughout the process.

ETF Stamp Duty Relief Accompanies Bond Issuance

The announcement also includes the introduction of stamp duty relief for ETF transactions. The new measure aims to reduce transaction costs and enhance market access for both institutional and retail investors. This aligns with the city’s goal to stimulate financial product innovation and increase trading volume.

The stamp duty exemption will apply alongside the tokenized bond issuance. The Financial Services and the Treasury Bureau (FSTB) said this move would support capital markets and attract global participation. By integrating cost relief with product launches, the government hopes to build a more competitive trading environment.

Legal and Regulatory Framework Supports Tokenization Push

Hong Kong is advancing a regulatory structure to support its tokenization efforts under the “LEAP” policy framework. LEAP stands for Legal clarity, Ecosystem expansion, Application development, and Professional talent. The framework outlines legal rules for asset tokenization and introduces licensing procedures for stablecoin issuers starting August 1.

Under the plan, the SFC will regulate digital asset dealers and custodians. Meanwhile, legal questions related to tokenized assets will be reviewed by the FSTB and HKMA. This cross-agency collaboration ensures that digital products follow both financial and technical standards.

At the same time, Hong Kong is tracking international developments in tokenized securities. In the U.S., Ondo Finance recently announced its acquisition of Oasis Pro to expand regulated infrastructure. Hong Kong’s parallel initiatives, such as bond issuance and stamp duty relief, indicate its intent to remain aligned with global digital asset trends.