Hong Kong to Launch Third Tokenised Bond With Zero Stamp Duty on ETFs
Hong Kong is going all-in on Web3. After two successful tokenised green bond issuances, the city-state is preparing to roll out its third tokenised government bond — now with a stamp duty exemption for tokenised ETFs.This strategic move aims to solidify Hong Kong’s position as a global digital asset hub. At the same time, the city is actively exploring tokenisation of real-world assets like precious metals, non-ferrous metals, and solar panels.Hong Kong’s Tokenised Bond Journey: From Pilot to Global ModelThe journey began in 2021 with “Project Genesis,” a proof-of-concept initiative with the Bank of International Settlements to explore tokenised green bonds.February 2023: First tokenised green bond worth HK$800 millionFebruary 2024: Second issuance — a multi-currency digital bond totaling HK$6 billion in HKD, RMB, USD, and EURThese initiatives laid the foundation for Hong Kong’s third issuance, which now takes the vision further with tax exemptions and real asset expansion.What’s New in the Third Tokenised Bond?Stamp Duty Exemption: Tokenised ETFs will now be exempt from stamp duty, creating cost advantages for investorsAsset Expansion: Tokenisation to include precious metals, non-ferrous metals, and solar panelsThis will enable fractional ownership and 24/7 access to traditionally illiquid asset classes, opening new doors for global investors.[post_titles_links postid="478916"]Key Benefits of the StrategyFractional ownership allows more investors to participate in high-value markets24/7 trading brings liquidity and efficiency to bond and asset marketsStamp duty exemption offers a financial incentive to invest in tokenised ETFsBroader asset tokenisation supports market democratisationChallenges Hong Kong Must NavigateTraditional financial systems need to integrate blockchain infrastructureBlockchain platforms must prove resilience, scalability, and cross-chain compatibilityRegulatory challenges grow with the need for investor protection, KYC/AML compliance, and risk managementFinal ThoughtsWith tax incentives and an expanding scope of tokenized offerings, Hong Kong is setting the stage for the next phase of digital finance. However, its success will depend on how well it aligns with international regulations and scales secure blockchain infrastructure for global adoption.[article_inside_subscriber_shortcode title="Never Miss a Beat in the Crypto World!" description="Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more." category_name="News" category_id="6"]FAQsWhat exactly is a tokenized government bond, and how does it work? A tokenized government bond is a digital representation of a traditional sovereign bond issued on a blockchain. Each token represents fractional ownership of the bond. Smart contracts automate processes like issuance, interest payments, and redemption, enhancing liquidity, transparency, and efficiency by reducing intermediaries and enabling 24/7 trading. What challenges must Hong Kong overcome for its Web3 strategy to succeed? Hong Kong must navigate challenges such as integrating blockchain infrastructure with traditional financial systems, ensuring blockchain platforms are resilient, scalable, and cross-chain compatible, and addressing regulatory complexities related to investor protection, KYC/AML compliance, and risk management in the evolving digital asset space.