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Letters

Feel strongly about these letters, or any other aspects of the news? Share your views by emailing us your Letter to the Editor at letters@scmp.com or filling in this Google form. Submissions should not exceed 400 words.
In late June, the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) confirmed that Hong Kong’s laws are ready for tokenised bonds. What sounds like a legal technicality is a springboard for the financial markets of the future.
Bonds, a mainstay of the financial system, can now be tokenised on a blockchain, enabling them to be bought, sold and settled almost instantly under Hong Kong’s existing legal frameworks.
But every trade has two sides: the asset changing hands, and the cash that settles it. Tokenising the bond speeds up the first side. It does nothing for the second, unless the money moves just as fast.
That’s where stablecoins come in: digital tokens pegged to a fiat currency, the only on-chain settlement asset that’s widely available and already the default way institutions settle tokenised trades worldwide.
The problem is that 99 per cent of that market is US dollar-backed, and Hong Kong currently has no recognition or equivalence framework that lets even the most rigorously regulated dollar-denominated stablecoins fully operate here.
This matters because liquidity flows to where dollar-denominated stablecoins move freely. Global stablecoin transactions reached US$33 trillion in 2025, up 72 per cent year-on-year.
Hong Kong has issued only two stablecoin licences, both for the Hong Kong dollar.
Put simply: Hong Kong has built a legally sound way to hold a tokenised bond, but not yet a legally clear way to pay for one using the currency institutions actually use.
The global regulatory environment is getting more competitive. The United States, European Union, Japan and Australia are all moving to recognise well-regulated overseas stablecoins, and whoever closes this gap first is likely to set the pace for the region.
Hong Kong’s second-phase legislative review, due later this year, is the natural place to fix this.
Lawmakers examining ownership and transfer of tokenised instruments should add a formal stablecoin recognition mechanism – enabling rigorously regulated dollar-denominated stablecoins to be utilised here without a separate local licence, extending the “same activity, same risk, same regulation” principle already endorsed by the HKMA.
Hong Kong’s stablecoin framework is already among the world’s most advanced. The five-year plan is a chance to finish the job: pairing a modern legal framework for tokenised bonds with a modern way to pay for them.
That’s what would turn Hong Kong into the Asia-Pacific’s tokenisation hub.
Rahul Advani, global co-head of policy, Ripple
What Beijing’s offshore insurance tax means for Hong Kong
The State Taxation Administration’s clarification that the 20 per cent tax on offshore insurance gains is neither a new decree nor an assault on Hong Kong’s financial sector is a welcome injection of clarity (“Beijing says 20% offshore insurance tax not new – and does not target Hong Kong”, August 7).
While the initial market reaction saw the stock prices of Hong Kong insurance giants tumble, this regulatory reminder captures a critical juncture for cross-border wealth management. As mainland financial institutions align under a highly risk-averse framework, the myth of the “unregulated, offshore tax haven” has effectively dissolved.
The market panic, however, is directionally wrong. Structural friction exists only for wealth strategies built solely on the frantic optimisation of loopholes or tax-deferred mechanisms. A wealth proposition predicated on hiding behind structural opacity was never sustainable; it merely deferred an inevitable global fiscal reality. For decades, the wealth sector frequently leveraged legacy trust and offshore frameworks for aggressive avoidance, snubbing insurance as a seemingly pedestrian tool despite its status as an ancient, classical instrument of foundational wealth preservation and risk mitigation.
When we re-anchor private capital in genuine family values, compliant philanthropy and robust legacy preservation, the transient uncertainty fades. True institutional-grade wealth architecture is never a passing shelter from fiscal audits; it is a permanent foundation for enduring legacy protection.
This regulatory milestone should not be viewed as a threat to private wealth preservation, but as a long-overdue catalyst for steering the industry back to an authentic wealth proposition. The future belongs to mature common law jurisdictions like Hong Kong that provide transparent, highly regulated and purpose-driven legal pathways for legitimate multi-generational governance.
Mike Cheung, founder and trustee, Cypress Charitable Trust


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Fintech

Hong Kong mustn’t fall behind in recognising overseas stablecoins

US President Donald Trump holds the signed Genius Act, which will develop a regulatory framework for stablecoins, at the White House on July 18, 2025. Photo: Reuters

Hong Kong’s US dollar peg explained: history, benefits and risks

The Hong Kong Monetary Authority logo at Two IFC. Photo: Jonathan Wong

The then-Financial Secretary Sir John Bremridge (second from the left), with the Secretary for Monetary Affairs, Douglas Blye (second from right) and Principal Assistant Secretary for Monetary Affairs, Joseph Yam Chi-kwong (right) announce the pegging of the Hong Kong dollar to the United States dollar at the rate of HK$7.80 against the greenback in October 1983. Photo: SCMP

HKMA warns of interest-rate risk as traders bet on September rate rise

The Hong Kong Monetary Authority at the International Financial Centre Building in Central, Hong Kong. Photo: Shutterstock


US Federal Reserve Chairman Kevin Warsh has announced his decision to keep the Fed’s base rate unchanged. Photo: Reuters

Hong Kong’s Chinese bond futures are a major step for the global yuan

A staff member of a bank in Haian, Jiangsu province, counts 100 yuan notes in March 2024. Foreign institutions held around 2 trillion yuan of Chinese government bonds as of the end of June 2026. Photo: Getty Images

Exchange Square in Central on July 21. Chinese treasury bond futures began trading on the Hong Kong stock exchange on August 3. Photo: Jelly Tse

Opinion

Readers discuss a recognition framework for dollar-denominated stablecoins, and the significance of Beijing’s offshore insurance tax for Hong Kong


Readers discuss a recognition framework for dollar-denominated stablecoins, and the significance of Beijing’s offshore insurance tax for Hong Kong.


.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Readers discuss a recognition framework for dollar-denominated stablecoins, and the significance of Beijing’s offshore insurance tax for Hong Kong

Readers discuss a recognition framework for dollar-denominated stablecoins, and the significance of Beijing’s offshore insurance tax for Hong Kong