Guotai Junan Research: Policy Declaration 2.0 How Digital Assets Can Emerge from the Sandbox

The integration of digital assets and TradFi is no longer a concept of the future. Hong Kong is ushering in the on-chain era with a clear regulatory framework and industrial roadmap, incorporating trillion-level real assets. On June 26, 2025, the Government of the Hong Kong Special Administrative Region released the "Hong Kong Digital Asset Development Policy Declaration 2.0" (hereinafter referred to as "Policy Declaration 2.0"), marking an important step forward for Hong Kong in the digital asset field. As a global financial center, Hong Kong reaffirms its ambition to create a digital asset innovation hub through this policy. In particular, regarding the tokenization of Real World Assets (RWA), the policy declaration proposes specific measures that point the way for the development of Hong Kong's RWA market.

Overview of Policy Declaration 2.0

The Policy Declaration 2.0 is based on the first Policy Declaration released in October 2022 and aims to further promote the development of Hong Kong's digital asset industry. The Policy Declaration 2.0 clarifies the government's vision of building a trusted and innovation-focused digital asset ecosystem, emphasizing risk management and investor protection, while also committing to bringing substantial benefits to the real economy and financial markets. The Financial Secretary, Paul Chan, stated that Policy Declaration 2.0 promotes the diversification of tokenization applications by combining prudent regulation with market innovation, creating a digital asset ecosystem closely linked with the real economy and social life.

The Policy Declaration 2.0 proposes the "LEAP Framework", covering the following four key areas:

Optimize Legal and Regulatory: Establish a unified regulatory framework for digital asset service providers, covering trading platforms, stablecoin issuers, trading service providers, and custody service providers.

Expand the variety of tokenization products: Encourage the tokenization of diverse assets, including financial and non-financial assets.

Promote application scenarios and cross-sector collaboration: Explore the application of digital assets in the real economy and promote cross-industry cooperation.

Talent and Partner Development: Invest in the cultivation of professional talent and infrastructure construction.

Product expansion is the focus of the Policy Declaration 2.0. In the 9-page "Policy Declaration 2.0", "stablecoin" appears 13 times, and "tokenization" appears 35 times. Furthermore, the Hong Kong government explicitly commits to regularizing the issuance of tokenized government bonds and exploring different currency and maturity structures to provide the market with stable, high-quality benchmark products. More critically, the policy extends the scope of tokenized assets beyond traditional financial instruments for the first time.

The regulatory framework continues to improve, activating RWA application scenarios

The regulatory framework in Hong Kong continues to improve, activating RWA application scenarios. Since the launch of the Hong Kong Monetary Authority's Ensemble regulatory sandbox program, several cross-border RWA pilot projects have been completed so far:

Langxin Group Charging Pile RWA Project

Longxin Group cooperated with Ant Group to complete the first domestic RWA project based on new energy physical assets in Hong Kong in August 2024. This project uses the revenue rights of 9,000 charging piles operated by Longxin's aggregation charging platform "Xindian Road" as the anchor asset, and monitors asset operation data in real time through Ant Blockchain's blockchain and AIoT technology, ensuring that the on-chain information is transparent and tamper-proof. Ultimately, it successfully raised 100 million RMB in Hong Kong, with the funds specifically used to support the construction and operation of small and medium-sized charging pile operators. This project has been included in the Hong Kong Monetary Authority's Ensemble regulatory sandbox program, becoming a benchmark case for green financial technology innovation. The core significance of this project lies in breaking the financing bottleneck for small and medium-sized new energy operators. According to statistics, 82% of domestic charging operators own less than 10 charging stations, and traditional financing channels are limited. However, RWA transforms physical revenue rights into digitally tradable digital assets through asset digitization, which not only opens up new paths for global capital to invest in China's new energy assets but also helps small and medium-sized operators revitalize existing assets and form a closed loop of investment and financing.

Xiexin Nengke Photovoltaic Power Station RWA Project

The photovoltaic power station RWA project of GCL-Poly Energy Holdings Limited was completed in December 2024 in cooperation with Ant Group's Digital Science and Technology, marking the first domestic RWA financing case based on photovoltaic physical assets, with a scale exceeding 200 million RMB. The project anchors approximately 82 MW of "Xinyangguang" household distributed photovoltaic power stations in Hubei and Hunan provinces. By integrating blockchain and Internet of Things (IoT) technologies, the real-time operational data and power generation revenue of the power station are packaged on-chain, forming traceable and tamper-proof digital certificates, successfully attracting multiple international investment institutions to participate and opening new avenues for foreign capital investment in China's green assets. The core innovation of the project lies in the "two chains and one bridge" technical architecture: the domestic "asset chain" ensures the dynamic on-chain of photovoltaic data (such as power generation and equipment status), the offshore "transaction chain" completes the issuance of tokens and fundraising through a compliant platform in Hong Kong, and the cross-chain bridge enables efficient cross-border circulation of assets and funds. This not only significantly enhances the liquidity and financing efficiency of photovoltaic assets but also provides a model for small and medium-sized operators to revitalize their existing assets.

Xunying Travel Battery Swapping Real-World Asset RWA Project

The Xunying Travel battery swap physical asset RWA project was launched on March 18, 2025, marking the world's first tokenization financing case based on battery swap physical assets. This project anchors battery swap cabinets and lithium battery assets nationwide, integrating blockchain and Internet of Things (IoT) technology to package key information such as asset operation data and revenue streams on-chain, forming traceable and tamper-proof digital tokens, successfully raising tens of millions of Hong Kong dollars. The project is managed by Hong Kong Victory Securities, with technical support from Ant Group, Conflux chain, and VDX, and is included in the Hong Kong Monetary Authority's Ensemble regulatory sandbox framework, achieving efficient connections between China's green assets and overseas capital. Its core innovation lies in addressing the heavy asset and long cycle pain points in the new energy industry. Through asset tokenization, Xunying Travel not only revitalized existing battery swap facilities and accelerated capital recovery but also significantly enhanced asset liquidity and transaction transparency, paving a "technology + finance" dual-driven upgrade path for the low-speed electric vehicle industry.

Since the beginning of this year, as the Hong Kong government steadily advances the regulatory and guidance framework centered around the Stablecoin Ordinance and Policy Declaration 2.0, it has not only provided market direction but also further stimulated the vitality of RWA. Looking forward, the improvement of Hong Kong's digital asset regulatory framework is constructing a new paradigm for the coordinated development of stablecoins and RWA. With the release of the Hong Kong Digital Asset Development Policy Declaration 2.0 and the implementation of the Stablecoin Ordinance, Hong Kong has established a globally leading "regulatory sandbox + licensing system + tax incentives" three-in-one institutional framework.** This framework not only endows stablecoins with the status of financial infrastructure—the HKMA's Ensemble platform has already supported interbank tokenized deposit settlement—but also expands the scope of tokenized assets from government bonds to physical assets through the "LEAP strategy", forming a virtuous cycle where "stablecoins provide liquidity, and RWA creates asset targets."**

Key Events

• Federal Reserve Chairman Powell stated: Legislation related to stablecoins is progressing, which is an exciting development; banks can provide banking services to the cryptocurrency industry and engage in related activities, provided that the safety and soundness of the financial system are ensured.
• Tim Scott, chairman of the U.S. Senate Banking Committee, informed White House cryptocurrency advisor Bo Hines that the cryptocurrency market structure bill will be completed by September 30. This timeline is later than the goal set by President Trump to complete it before the August congressional recess, but earlier than Senator Cynthia Lummis's previous prediction of completion by the end of the year. Scott stated at a press conference that "completing market structure legislation by the end of September is a realistic expectation," to which Lummis expressed support.
• The Federal Housing Finance Agency of the United States has ordered Fannie Mae and Freddie Mac to develop a plan to include cryptocurrency in the asset category for mortgage risk assessment. The directive requires the two agencies to explore how to allow borrowers to count cryptocurrency held in U.S. regulated centralized exchanges as assets without having to liquidate it in advance. Currently, the policy is still in the early stages, and the related plan must be approved by the boards of directors of both agencies and the FHFA before implementation.
• According to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) cryptocurrency working group met with the New York Stock Exchange to discuss cryptocurrency regulation proposals. Agenda items included: tokenization of stock trading, universal listing standards for spot cryptocurrency trading products (ETPs), and promoting a fair competitive environment among market participants.
• The report from the Bank for International Settlements indicates that digital assets pegged to fiat currencies have not passed the three key tests of uniqueness, elasticity, and integrity, and therefore cannot serve as a pillar of the monetary system. In terms of uniqueness, as a digital bearer instrument, stablecoins lack the settlement function provided by central banks. Stablecoins often trade at different exchange rates, undermining uniqueness and failing to meet the principle of banks issuing currency "without questioning the reason." The lack of elasticity in stablecoins stems from their design. Stablecoins are typically backed by nominally equivalent assets, and any additional issuance requires full payment upfront from holders, a constraint of "paying cash first" that undermines elasticity. Furthermore, not all issuers adhere to standardized KYC/AML guidelines, leading to deficiencies in integrity.