Hong Kong Monetary Authority has issued guidelines to local banks on the use of distributed ledger technology (DLT) and support for the development of Hong Kong's virtual asset ecosystem, in order to support banks in using DLT in a risk-controlled manner. Through clarifying the main regulatory considerations of the Authority, it aims to further promote the wider application of DLT in the industry, including establishing appropriate governance, ensuring the design suitability of DLT application projects, and continuous maintenance and supervision of DLT projects. In order to accommodate the diverse development of technology and the market, the Authority will continue to maintain close communication with the industry and support the orderly development of Hong Kong's virtual asset ecosystem in a risk-controlled manner.

Wu Jiezhuang, a member of the National Committee of the Chinese People's Political Consultative Conference and a member of the Legislative Council of the Hong Kong Special Administrative Region, wrote an article in Takungpao titled "Inside and Outside the Parliament/Three-party Cooperation to Develop 'Virtual Asset Banks'". The article pointed out that in order to address industry pain points, a "virtual asset bank" should be established to further provide comprehensive virtual financial services and facilities, including buying and selling and exchange services of virtual currencies for individual customers, providing unified virtual asset clearing, settlement, and custody services for qualified virtual asset service providers, reducing the market entry threshold for small and medium-sized investors; and assisting and encouraging the industry to provide related "intermediate income businesses" such as insurance, funds, asset management, etc., to provide more innovative virtual financial products and services, and to comprehensively develop the ecosystem combining traditional and virtual finance.

Huang Weilun, the Deputy Secretary of Financial Services and the Treasury of the Hong Kong Special Administrative Region, said in his speech at the opening ceremony of the Web3 Carnival in Hong Kong that "Web3 is revolutionary, and Hong Kong will develop in a stable, sustainable, and responsible manner. Hong Kong mainly focuses on two areas in the development of Web3: first, supporting Hong Kong's virtual asset trading platforms, and second, supporting Web3 developers. The Hong Kong government is amending a law to include OTC trading of virtual assets under legal supervision, and the proposed law is being formulated. In addition, Hong Kong will allow intermediaries to provide trading of virtual assets, futures, and ETFs that meet certain conditions. In the future, we will continue to cooperate with more industry participants, bring more possibilities to Hong Kong with more insights, and promote the development of the Hong Kong Web3 industry."

Hong Kong legislator Wu Jiezhuang revealed that Hong Kong will release stablecoin consultation and sandbox (computer security mechanism), which will allow the industry to innovate digital asset projects in the sandbox environment. Relevant legislation will be reviewed in the Legislative Council at the end of this year or next year, which will help the entire digital asset industry ecosystem. Hong Kong has been improving the digital asset (virtual asset) market on different legal levels. Last year, there were regulations on virtual currency trading platforms and issuance systems.

Yitong Communications Group, a Hong Kong-listed company, announced its performance report as of the end of 2023. As of December 31, 2023, the company held a total of 165,385 shares of Hong Kong Virtual Asset Exchange (VAX), accounting for approximately 8.14% of the issued share capital of VAX, with a fair value of approximately HKD 1,543,000. It is reported that VAX is applying to the Hong Kong Securities and Futures Commission for a Type 1 (securities trading) and Type 7 (providing automated trading services) regulated activity license under the Securities and Futures Ordinance for regulating virtual asset trading platforms.

The Hong Kong Monetary Authority (HKMA) has announced the launch of the second phase of its e-HKD central bank digital currency (CBDC) pilot. The regulator will build on the first phase, which tested the use of a CBDC in domestic retail payments, offline payments and settlement of tokenised assets, and explore new applications for a digital version of the Hong Kong dollar. The second phase will focus on select pilots from the first phase, such as programmability, tokenisation and atomic settlement, and also explore new use cases. The HKMA has also started a regulatory sandbox project to test CBDCs for wholesale use and tokenisation.

The Hong Kong Monetary Authority (HKMA) announced on March 7 the launch of Project Ensemble, which focuses on studying the tokenization of private bank deposits using wholesale central bank digital currency (WCBDC). The institution clarified that the project will study the potential benefits to the financial system of tokenizing deposits using WCBDC, including optimizing interbank settlements. Nevertheless, the WCBDC, which is the core of the system, will also be part of the sandbox aimed at testing its application for other purposes, such as settling tokenized real-world assets (RWA).

The Hong Kong Monetary Authority (HKMA) has announced the launch of a new wholesale-level central bank digital currency (wCBDC) project called Ensemble to support the development of Hong Kong's tokenized market. The focus of the Ensemble project is the HKMA's sandbox for wCBDC, which will be launched this year. The sandbox will further study and test tokenization use cases, including the settlement of tokenized real-world assets (such as green bonds, voluntary emission reductions, airplanes, electric vehicle charging stations, electronic bills of lading, and treasury management). It is more likely to develop into new financial market infrastructure, serving as a bridge between tokenized real-world assets and tokenized currencies in transactions.

At least 22 crypto firms, including industry giants like OKX, ByBit, and Huobi HK, have applied for operational licenses in Hong Kong. If approved, these firms will be able to offer retail trading services in the region and contribute to Hong Kong's efforts to become a major crypto hub. Hong Kong's clear regulatory framework has attracted many crypto-based firms looking for a conducive environment for their businesses to thrive. The influx of diverse players promises to foster healthy competition and innovation within the sector, while also reflecting a broader trend of regulatory compliance and institutional acceptance within the crypto industry.

The Hong Kong Exchanges and Clearing Limited announced that Charles Li Xiaojia had retired as the Chief Executive Officer and a member of the Board of Directors of the Hong Kong Exchanges and Clearing Limited. Starting from March 1st, 2024, Nicolas Aguzin has been appointed as the Chief Executive Officer and a member of the Board of Directors of the Hong Kong Exchanges and Clearing Limited. Aguzin's appointment means that the Hong Kong Exchanges and Clearing Limited welcomes its first female CEO in history. Aguzin, 54 years old, holds a Bachelor of Laws degree from the University of Hong Kong and a Master of Laws degree from Harvard Law School in the United States. She has more than 30 years of experience in legal and financial services. In January 2020, Aguzin joined the Hong Kong Exchanges and Clearing Limited as the Chief Executive Officer of the Listing Division and was previously the Co-Chief Operating Officer of the Hong Kong Exchanges and Clearing Limited.