This means that the focus of Hong Kong's digital asset policy is shifting from "establishing a market" to "integrating the market into the financial system."

Written by: Conflux

For a period of time, Hong Kong has addressed a very clear issue in digital assets: what can be done and who can do it. Trading platforms have begun to be licensed, a regulatory system for stablecoin issuers has been established, and tokenized funds, bonds, and other products are gradually entering pilot programs.

The first five-year plan for Hong Kong, published on September 16, advances this issue further. The "First Five-Year Plan for Economic and Social Development of the Hong Kong Special Administrative Region (2026—2030)" proposes that in the next five years, deep applications of digital financial infrastructure will be promoted, cautiously advancing the development of stablecoins, tokenized deposits, tokenized bonds, tokenized securities, and expanding the coverage of financial regulatory sandboxes.

This means that the focus of Hong Kong's digital asset policy is shifting from "establishing a market" to "integrating the market into the financial system." What deserves real attention is precisely this latter point.

From Licensing to Infrastructure

Hong Kong has not just started talking about stablecoins.

In August 2025, the "Stablecoin Regulation" officially took effect, establishing a regulatory system for fiat-reference stablecoin issuers in Hong Kong. By April 2026, the Hong Kong Monetary Authority had already issued stablecoin issuer licenses to two institutions.

In June this year, the Hong Kong government further clarified in a reply to the Legislative Council that stablecoins would need actual application scenarios in the future and emphasized their synergistic development with central bank digital currencies and tokenized assets.

The policy path has become quite clear: first resolve issuance qualifications, then address application scenarios.

The five-year plan has taken a further step forward.

The plan does not place stablecoins in a separate "virtual asset" box but includes them within a framework for the development of digital finance alongside data and payment infrastructure, financial tokenization, tokenized deposits, tokenized bonds, and tokenized securities.

At the same time, "Finance + Trade" has been proposed separately, focusing on trade finance, supply chain finance, settlement and clearing, and risk management services.

Looking at these two directions together, the amount of information is much greater than looking solely at "stablecoins." What Hong Kong truly aims to build may not be a larger cryptocurrency trading market but rather a set of financial infrastructure that can connect asset issuance, payment, settlement, trade finance, and capital flow in a digital environment.

Banks Remain a Key Component

There is a point here that can be easily misinterpreted. The integration of stablecoins into the financial system does not mean that banks are excluded.

On the contrary, the previous regulatory design in Hong Kong has placed the banking system in an important position.

The current stablecoin regulations require issuers to manage reserve assets, mandating that eligible reserve assets include bank deposits, high-quality, high-liquidity debt securities, and more.

This year's policy arrangements are also promoting links between stablecoins, banks, tokenized deposits, and other payment tools.

The "Chief Executive's Policy Address 2026" further proposes promoting regulated stablecoins to be traded on licensed virtual asset trading platforms and used for the settlement of tokenized money market funds; the Monetary Authority plans to continue exploring the application of tokenized deposits.

Therefore, future competition may not be "banks vs. stablecoins." Instead, it is more likely that a different relationship will emerge: banks responsible for credit, accounts, reserve assets, and traditional financial services; stablecoins undertaking part of the on-chain payment and settlement functions; and the underlying blockchain responsible for the digital operation of assets and transactions.

Who can truly connect these different layers will be closer to the core of the next stage of digital financial infrastructure.

Industry Recommendations Before the Plan

During the planning period, Conflux participated in industry recommendations for Hong Kong's five-year plan through members of the Legislative Council and submitted opinions related to the digital financial infrastructure ecosystem.

The officially announced five-year plan for Hong Kong now includes digital financial infrastructure, stablecoins, tokenized assets, and their practical applications within the development framework for the next five years.

This leaves more room for public chain infrastructure than just a "designated list." Because once policies shift from "encouraging innovation" to "infrastructure building," the standards of market competition will also change accordingly.

In the past, judging a public chain, the market was more accustomed to looking at TPS, transaction fees, the number of developers, ecosystem projects, and token performance. But if blockchains begin to carry stablecoins, RWA, trade settlements, and financial products, these indicators will no longer be sufficient.

What financial institutions truly care about will shift to a different set of standards: Is the network stable enough? Are on-chain assets and transactions auditable and traceable? Can they connect to KYT and risk monitoring systems, and can they integrate with existing systems of custodians, payment, trading platforms, and financial institutions? For cross-border finance, the requirements will further increase: after a transaction occurs, can the assets, funds, and transaction data form a complete link between different institutions?

From the previous focus during industry recommendations, Conflux's thoughts on public chain infrastructure are not merely limited to technical performance but extend further to security, stability, compliance interfaces, asset registration, cross-border payments, and the capacity to carry real business scenarios. If Hong Kong truly moves digital finance from licensing and product pilots to real applications in the next phase, such evaluation standards will become increasingly meaningful.

The plan clearly states that it aims to explore deep applications of digital financial infrastructure while also deepening the application of financial regulatory sandboxes and expanding their coverage.

Usage Scenarios for Stablecoins

Hong Kong now has a stablecoin regulatory system and the first batch of licensed issuers has emerged. The next question will become more specific: where will these stablecoins circulate?

If stablecoins remain only on virtual asset trading platforms, they are still primarily a tool for the digital asset market. But if they begin to enter cross-border trade payments, corporate treasury, multi-currency settlements, tokenized fund settlements, and even further connect with trade finance and supply chain finance, their nature will change.

The Hong Kong government also stated in the Legislative Council in March this year that stablecoins, digital renminbi, tokenized deposits, and fast payment systems have cross-border connection potential for transaction settlements and local or cross-border payments; future application prospects will largely still depend on market forces.

This is also the reason why "Finance + Trade" in the five-year plan should be viewed alongside digital finance.

Hong Kong itself is an international trade and financial center. If stablecoins can reduce cross-border settlement costs in certain scenarios, and on-chain transaction data can enter corporate credit, trade finance, and supply chain finance systems under compliance conditions, then the value of blockchain will no longer be just "putting assets on the chain." It will start to connect a complete business link: asset issuance → payment settlement → transaction data → credit assessment → financing.

This is where public chain infrastructure may truly generate long-term commercial value.

After the Five-Year Plan

The five-year plan has clearly outlined the direction. In terms of digital finance, Hong Kong will continue to promote developments in data and payment infrastructure, financial tokenization, stablecoins, tokenized deposits, and tokenized securities; in trade, it will continue to strengthen trade finance, supply chain finance, settlement and clearing, and risk management.

However, there remains a significant distance between policy goals and market outcomes. Are there enough real users for stablecoins? Are banks willing to integrate? Why should enterprises change their existing settlement methods? These questions ultimately will not be answered directly by a five-year plan. They require banks, stablecoin issuers, financial institutions, trading platforms, payment companies, and public chain infrastructure to jointly find the answers.

For Conflux, this also means a new phase of competition. In the past, public chains competed for developers and liquidity on-chain; if Hong Kong's digital financial construction gradually takes shape over the next five years, what public chains will also need to compete for is whether financial institutions are willing to bring real assets and real payments onto the platform.

Hong Kong has begun to establish a regulatory framework. The next step that will truly determine how far digital finance can go may not be how many licenses are added, but which set of infrastructure can effectively support the real business behind these licenses.

Stablecoins already have issuance rules; the next competition will be about who will handle every transaction flowing into the real financial world.