The global financial landscape is witnessing a significant shift as stablecoins capture increasing market attention. This surge is driven by advancing regulatory frameworks overseas and the recent passage of Hong Kong's Stablecoin Ordinance Bill. With regulatory mechanisms gradually maturing, stablecoins have become a focal point for institutional players.
Amid this evolving environment, fund subsidiaries in Hong Kong are actively positioning themselves to leverage new opportunities. For instance, the upgrade of Guotai Junan International's virtual asset trading license directly spurred a rally in stablecoin-related concept stocks, while FinTech and related ETFs continue to attract capital inflows.
Understanding Stablecoins and Their Rising Prominence
Stablecoins are a type of cryptocurrency designed to maintain a stable value, addressing the extreme volatility seen in mainstream cryptocurrencies like Bitcoin and Ethereum. They achieve this stability by being pegged to assets such as fiat currencies, gold, or U.S. treasury bonds. Recent regulatory advancements have enhanced their compliance profile, requiring major stablecoin issuers to monthly disclose reserve reports and hold 100% of assets in custody. As of May 2025, the global issuance of stablecoins has surpassed $235 billion.
Hong Kong's Stablecoin Ordinance Bill, set to take effect on August 1, establishes a licensing-based regulatory framework centered around 1:1 high-liquidity asset reserves. It also explores the inclusion of the Chinese yuan as an applicable currency, aiming to create a chain-compatible hub for the circulation of stablecoins denominated in Hong Kong dollars, yuan, and U.S. dollars.
Fund Subsidiaries Step into the Stablecoin Ecosystem
Several Hong Kong-based subsidiaries of public fund companies are intensifying their preparations in the stablecoin space. Even before the formal issuance of stablecoin licenses, these entities are engaging in comprehensive testing of all operational processes.
A notable participant is China Asset Management (Hong Kong), which has been involved in multiple sandbox projects led by the Hong Kong government. These initiatives include the stablecoin sandbox, Project Ensemble, and the e-HKD Pilot, covering critical aspects such as stablecoin issuance, payment processing, asset对接, and fund subscriptions and redemptions. Through collaborations with the Hong Kong Monetary Authority, HSBC, Visa, ANZ, and other major FinTech and traditional financial institutions, the company has completed tests on chain-based payments, tokenized fund transactions, and end-to-end fund flow processes.
China Asset Management (Hong Kong)'s CEO, Gan Tian, previously revealed during the China Wealth Management 50 Forum that the initial phase of the stablecoin sandbox involved three institutions: Yuan Fu Innovation Technology, JD Coin Chain Technology, and Standard Chartered Bank. China Asset Management (Hong Kong) has partnered with one of these potential stablecoin issuers to jointly submit a cash management solution to the Hong Kong Monetary Authority. The company is currently in ongoing discussions with regulators and partners to advance to the next phase of collaboration.
"Once the relevant regulatory rules from the Hong Kong Securities and Futures Commission are finalized, we will explore the application of funds within the stablecoin ecosystem, such as allowing investors to use compliant stablecoins for subscriptions and redemptions," said Zhu Haokang, Head of Digital Asset Management and Family Wealth at China Asset Management (Hong Kong). He added that achieving this innovative application could lead to significant growth in fund management scale.
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Pioneering the Digital Asset Arena
Even prior to these developments, several fund subsidiaries had already made strategic moves into the virtual asset space. In April 2024, the Hong Kong market officially listed six virtual asset spot ETFs. Bosera Funds (International), China Asset Management (Hong Kong), and Harvest International respectively launched the Bosera Bitcoin ETF, Bosera Ethereum ETF, ChinaAMC Bitcoin ETF, ChinaAMC Ethereum ETF, Harvest Bitcoin ETF, and Harvest Ethereum ETF. These funds directly hold Bitcoin and Ethereum, supporting both cash subscriptions and in-kind subscriptions (where investors can directly exchange their held Bitcoin or Ethereum for ETF shares). Investors can purchase these ETFs through securities brokers in Hong Kong.
Among these pioneers, China Asset Management (Hong Kong) has ventured further. The company entered the digital asset arena two years ago. Besides launching Asia's first batch of spot crypto asset ETFs in April 2024, it issued a Hong Kong dollar-denominated tokenized money market fund in February 2025. This product is also Asia's first retail tokenized fund, bringing real-world asset (RWA) tokenization to the Hong Kong retail market. The company plans to continue expanding its tokenized fund product series. In March, Bosera Funds (International), in collaboration with HashKey Group, also received approval from the Hong Kong Securities and Futures Commission for its Hong Kong dollar and U.S. dollar money market ETF tokenization scheme.
Building Teams and Infrastructure for the Future
Recognizing the vast opportunities in the stablecoin market, many fund subsidiaries are moving quickly to secure talent specializing in virtual assets. For example, Bosera Funds (International) recently posted a job opening for a product manager focused on virtual assets. The role requires at least three years of product experience in virtual assets, FinTech, blockchain, electronic mobile payments, or related financial fields.
The responsibilities for this position include designing and issuing virtual asset-related products, managing their entire lifecycle, and promoting the integration of traditional financial products with virtual assets and stablecoins. The role also involves researching global trends in virtual assets and stablecoins, monitoring regulatory policies and competitive dynamics, and driving differentiated product design. Additionally, the manager will be tasked with building product architectures related to virtual assets and stablecoins, covering key modules such as investment, trading, custody, clearing, payment processing, and income distribution.
Regarding team structure, China Asset Management (Hong Kong) noted that it established a digital asset department and team last year during the issuance of its Bitcoin and Ethereum ETFs. This team encompasses functions including product management, investment management, business development, operations, and compliance and legal affairs.
The company stated that it plans to launch more tokenized fund products in the future, promote the secondary circulation of tokenized funds on compliant trading platforms, and explore the use of digital currencies like stablecoins and the digital Hong Kong dollar for settlement to optimize the efficiency of on-chain fund transactions. These efforts aim to collectively advance the development and maturation of Hong Kong's digital financial ecosystem.
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Frequently Asked Questions
What is a stablecoin?
A stablecoin is a type of cryptocurrency designed to minimize price volatility by being pegged to a stable asset or basket of assets, such as a fiat currency (e.g., the U.S. dollar), gold, or other cryptocurrencies. This pegging mechanism aims to maintain a consistent value.
How are fund subsidiaries in Hong Kong involved with stablecoins?
Fund subsidiaries are actively testing and integrating stablecoins into their operations. They participate in regulatory sandboxes, develop tokenized funds, and explore using stablecoins for fund subscriptions, redemptions, and settlements, aiming to enhance efficiency and accessibility.
What are the benefits of tokenized funds?
Tokenized funds represent traditional fund shares on a blockchain, offering potential benefits like faster settlement times, increased transparency, reduced operational costs, and the ability to facilitate smaller investment sizes, making them more accessible to a broader range of investors.
Is it safe to invest in funds involving stablecoins or virtual assets?
While innovation offers new opportunities, investing in products involving virtual assets carries specific risks, including technological, regulatory, and market volatility risks. It's crucial to invest through licensed, compliant platforms and understand the associated risks thoroughly.
What regulatory developments are supporting this trend in Hong Kong?
Hong Kong has passed the Stablecoin Ordinance Bill, establishing a licensing framework for issuers. The Securities and Futures Commission is also developing rules for virtual asset-related products, creating a more structured environment for their development and adoption.
Can retail investors participate in these new digital asset products?
Yes, several products, like the recently launched tokenized money market fund and virtual asset ETFs, are designed for and available to retail investors in Hong Kong through licensed securities brokers, though eligibility should always be checked based on individual jurisdiction.