Policy Address 2026 | HK to test tokenization of $1.3t Exchange Fund bills, regularize e-bond issuance
RWA Signal Insight
InfrastructureHong Kong Chief Executive John Lee Ka-chiu announced that the Hong Kong Monetary Authority will begin testing the tokenization of HK$1.3 trillion in Exchange Fund bills by the end of 2026. This initiative aims to enhance asset and liability management efficiency by enabling round-the-clock utilization of these bills for lenders. The government plans to regularize digital bond issuance, building on its status as a global leader that accounted for nearly 50 percent of new digital bond issuances between 2025 and mid-2026. To support this ecosystem, CMU OmniClear will launch a digital asset platform this year to provide comprehensive issuance and settlement services. Furthermore, the HKMA’s tokenized bond expert group is initiating a second-phase legal review to integrate Distributed Ledger Technology into the broader capital market. These efforts are designed to solidify Hong Kong's position as a premier hub for digital finance and innovation. By exploring full-cycle applications like automated dividend payments and redemptions, the city seeks to modernize its financial infrastructure and improve market liquidity.
Key points
- HKMA to test tokenization of HK$1.3 trillion in Exchange Fund bills by year-end.
- Hong Kong captured nearly 50% of global digital bond issuances from 2025 to mid-2026.
- CMU OmniClear launching a digital asset platform for bond issuance and settlement this year.
- Government initiating second-phase legal review to expand DLT application in capital markets.
Background
The Hong Kong Monetary Authority (HKMA) is the territory's central banking institution, responsible for maintaining currency stability and managing the Exchange Fund. The Exchange Fund is a portfolio of assets used to back the Hong Kong dollar and support the city's financial stability, primarily consisting of high-quality liquid assets like government bonds.