HKMA Chief Executive Eddie Yue said Hong Kong banks are experiencing rapid growth in digital asset business, with digital and tokenized asset transactions up 233% year-on-year in the first half of this year. He expects Hong Kong to become the world’s largest wealth management center in the next few years.
According to a report by Lianhe Zaobao, Yue wrote in an HKMA column on the 4th that an increasing number of Hong Kong banks are exploring the sale of digital asset-related products, tokenized assets, and digital asset custody services. As of mid-July this year, 22 banks have been approved to sell digital asset-related products, 13 banks have been approved to sell tokenized securities, and another 5 banks have been approved to provide digital asset custody services.
He revealed that in the first half of this year, the total number of bank digital asset-related product and tokenized asset transactions reached HK$26.1 billion (RM14.222 billion), up 233% from the same period last year, and has already surpassed the total transaction volume for all of last year.
Yue said that several asset management firms have announced plans to launch tokenized products, and with the Hong Kong government promoting the issuance of tokenized bonds, he believes Hong Kong’s growth momentum in the digital asset sector will continue, bringing new impetus to the development of Hong Kong’s wealth management business.
Yue cited a report by Boston Consulting Group (BCG) stating that Hong Kong is expected to become the world’s largest wealth management center in the next few years. The SAR government is promoting policy innovation and market optimization to consolidate Hong Kong’s leading position as an international hub for wealth management and asset allocation.
He also pointed out that, according to Securities and Futures Commission surveys, by the end of 2024, Hong Kong’s assets under management will have grown by 13% year-on-year to HK$35 trillion (RM19.07 trillion), and the HKMA has observed international financial institutions actively expanding their business footprint in Hong Kong.
Yue believes that macroeconomic uncertainty is also prompting international investors to more actively pursue diversified investment strategies to spread risk, especially as allocations in Chinese and Renminbi assets are gradually increasing.
He cited data from the research company EPFR (Emerging Portfolio Fund Research), stating that in the second quarter of this year, investment funds made a net inflow of about US$91.5 billion (RM391.39 billion) into Asian markets, including about US$44.3 billion (RM189.49 billion) net inflow into the Chinese market.