Hong Kong removes key legal uncertainty around tokenised bonds

Hong Kong has taken another significant step towards the wider adoption of tokenised bonds, with the FSTB and HKMA concluding that the city's existing legal and regulatory framework is already sufficiently flexible to support tokenised bond issuances.

A recent Guidance Note co-authored by Karen Lam, together with The Hong Kong Chartered Governance Institute (HKCGI) and the Asia-Pacific Structured Finance Association (APSA) highlights how new Companies Registry guidance confirms that DLT-based registers of debenture holders can satisfy statutory record-keeping requirements, providing greater certainty for issuers and governance professionals.

The developments form part of Hong Kong's broader strategy to modernise its fixed income markets, supported by regular government tokenised bond issuances, the HKMA's Digital Bond Grant Scheme and the planned CMU OmniClear digital asset platform.

Looking ahead, the next phase of the review will explore further measures to support digital fixed income markets, including electronic execution of issuance documents and greater legal clarity around tokenised instruments.

Together, these developments send a clear message: the foundations for tokenised bonds in Hong Kong are already in place, and attention is now turning towards scaling adoption and unlocking the efficiencies of digital capital markets.