Hong Kong is better placed than many of its Asian peers to turn stablecoins into commercially viable products at scale, underpinned by its early lead in tokenisation and growing experience in moving financial infrastructure on-chain, according to HSBC’s head of digital assets research.

“Hong Kong already has examples of deploying the technology and can now look towards commercial applications and scaling,” said Daragh Maher, HSBC’s head of digital assets research, in an interview on the sidelines of the HSBC Global Investment Summit this week.

As part of its push to establish itself as a global cryptocurrency hub, Hong Kong has developed a relatively comprehensive regulatory framework for digital assets while testing real-world use cases across its broad financial ecosystem.

Since August 2024, the Hong Kong Monetary Authority (HKMA) has been piloting tokenised deposits for settling digital asset transactions. The city has also issued digital green bonds three times, most recently in November, raising a record HK$10 billion.

This year, those efforts were expanded under the HKMA’s “Project Ensemble” initiative, bringing together banks and industry participants such as Ant International and BlackRock to explore the use of tokenised deposits in transactions involving tokenised money market funds.

Industry participants said tokenisation required an on-chain cash leg to unlock its full efficiency gains, with stablecoins emerging as a key payment rail to support that shift.