Tokenization regulation · Hong Kong

Tokenization regulation in Hong Kong: the SFC circulars

Tokenization is generally permitted in Hong Kong. The Securities and Futures Commission (SFC) treats tokenised securities as traditional securities with a tokenisation wrapper, under the principle of “same business, same risks, same rules”. Existing securities law, including the prospectus and offers-of-investments regimes, generally continues to apply, plus SFC expectations on tokenisation risks.

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Educational overview, not legal, tax or investment advice. Regulation changes, and the answer for any project depends on the asset, the structure, the investors and where they are. Consult qualified counsel in each jurisdiction before you issue, offer or market anything. Last reviewed 16 October 2026.

What did the SFC's November 2023 tokenised securities circular change?

The 2 November 2023 circular on intermediaries engaging in tokenised securities-related activities superseded the SFC’s 2019 Statement on Security Token Offerings. In summary:

  • The professional-investors-only restriction for tokenised securities was lifted; public offers must still comply with the public offering regimes or an exemption.
  • Complexity is assessed on a see-through basis, by reference to the underlying security.
  • Intermediaries should discuss plans with their SFC case officer in advance; registered institutions also notify the HKMA.
  • Intermediaries must do due diligence on the product, technology, issuer and third-party vendors, and give clients clear information on matters such as settlement finality, transfer limits, smart-contract audits and custody.

Can SFC-authorised funds be tokenised?

Yes, subject to conditions. The SFC’s circular on tokenisation of SFC-authorised investment products, first issued on 2 November 2023 and revised on 20 April 2026, takes a see-through approach to primary dealing (subscription and redemption):

  • The underlying product must meet all applicable authorisation requirements, plus safeguards for tokenisation risks.
  • The product provider remains ultimately responsible for the tokenisation arrangement and ownership records, even if functions are outsourced.
  • Public-permissionless blockchains should not be used without additional controls.
  • New tokenised products require prior consultation; tokenising existing products may require prior approval.

Can tokenised funds trade on secondary markets in Hong Kong?

Since 20 April 2026, an SFC circular on secondary trading allows retail trading of tokenised SFC-authorised investment products on SFC-licensed virtual asset trading platforms, with safeguards: at least one market maker per product, published indicative NAV, alerts when prices deviate from NAV, and specific risk disclosures.

How does Libertum fit in?

Libertum is a software platform (T-Suite). It is not licensed, registered or authorised in Hong Kong and is not an SFC-licensed intermediary or virtual asset trading platform there. What the software does:

  • On-chain compliance rules. ERC-3643, CIP-113 and authorised XRPL tokens can enforce country allow/restrict lists, maximum balance, hold time and KYC claims, rejecting non-conforming transfers (Compliance).
  • KYC and KYB run through Sumsub.
  • Structuring module (Beta) with jurisdiction packs for El Salvador CNAD/LEAD, US SEC Reg D/Reg S, EU MiCA/MiFID II and Cayman Islands CIMA. Only the Cayman pack is counsel-reviewed and published; the others are drafts marked “Beta — pending counsel review”. Structuring is a software tool, not a Libertum legal or structuring service.

Libertum, S.A. de C.V. holds an El Salvador Digital Asset Service Provider (DASP) licence from the Comisión Nacional de Activos Digitales (CNAD), registry entry PSAD-0094, covering custody, exchange and transfer of USDT and USDC and receipt and transmission of client orders (LEAD Art. 19 (a), (d) and (f) numerals 1 and 2); RLUSD custody is approved by the CNAD under the same registration. It does not authorise any issuance, has effect in El Salvador only and confers no passporting or authorisation in Hong Kong. Issuers remain responsible, with their own counsel, for registration or exemption analysis in every jurisdiction. See Licences.

Related

Hong Kong tokenization FAQ

Is tokenization legal in Hong Kong?

Generally yes, but a tokenised security is still a security. Offers to the Hong Kong public must comply with the prospectus or Part IV SFO regimes or fall within an exemption, and intermediaries must meet SFC expectations on tokenisation risks.

Are tokenised securities limited to professional investors?

Not as such. The November 2023 circular lifted the professional-investor-only restriction, but public offers still need to comply with the public offering regimes or an exemption.

Does the 2019 SFC Statement on Security Token Offerings still apply?

No. It was superseded by the 2 November 2023 circular on tokenised securities-related activities.

Is Libertum licensed by the SFC?

No. Libertum is a software platform and holds no SFC licence or registration. Its El Salvador DASP licence (PSAD-0094) has effect in El Salvador only.

Primary sources

Last checked:

  1. SFC — Circular on intermediaries engaging in tokenised securities-related activities (2 November 2023) — Definition of tokenised securities; 'same business, same risks, same rules'; traditional securities with a tokenisation wrapper; prospectus regime (C(WUMP)O) and Part IV SFO apply to public offers; supersedes the 2019 Statement on Security Token Offerings; professional-investor-only restriction lifted; see-through complexity; advance notification to the SFC (and HKMA for registered institutions); ownership and technology risks; due diligence and client disclosure.
  2. SFC — Circular on tokenisation of SFC-authorised investment products (2 November 2023, superseded) — Original November 2023 position (primary dealing permitted with safeguards; caution on secondary trading); page marks it as superseded by 26EC22.
  3. SFC — Circular on tokenisation of SFC-authorised investment products (20 April 2026) — See-through approach to primary dealing; product provider remains ultimately responsible; no public-permissionless chains without additional controls; prior consultation or approval; secondary trading on SFC-licensed VATPs.
  4. SFC — Circular on secondary trading of tokenised SFC-authorised investment products (20 April 2026) — Retail secondary trading on SFC-licensed VATPs; at least one market maker per product; iNAV publication; price-deviation alerts and risk disclosures.

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