Hong Kong’s Financial Secretary Paul Chan Mo-po has embarked on an ambitious diplomatic mission to Seoul, positioning the special administrative region as Asia’s premier digital asset hub through strategic collaboration with South Korea.
The three-day visit, which concluded last week, represents a significant push to reinvigorate Korean investment in Hong Kong’s financial markets while showcasing the city’s emerging stablecoin regulatory framework.
Chan’s diplomatic efforts come at a crucial time as Hong Kong seeks to rebuild international confidence following years of reduced diplomatic engagement due to COVID-19 restrictions and geopolitical tensions.
The timing proved fortuitous, with Korean financial institutions demonstrating unprecedented interest in Hong Kong’s evolving digital asset landscape, particularly the upcoming stablecoin legislation that could reshape regional cryptocurrency markets.
During meetings with senior officials including the chairman of South Korea’s Financial Services Commission and the governor of the Bank of Korea, Chan emphasized Hong Kong’s unique positioning as a “superconnector” capable of bridging East and West.
Stablecoin Regulation Discussions
The centerpiece of the Hong Kong-South Korea discussions focused on digital asset regulation, with Korean regulators expressing keen interest in Hong Kong’s forthcoming stablecoin legislation. This regulatory framework represents a cornerstone of Hong Kong’s strategy to create a trusted and sustainable digital asset market capable of addressing real-world economic challenges across the region.
Christopher Hui, Secretary for Financial Services and the Treasury Bureau, outlined Hong Kong’s comprehensive approach to digital asset regulation, which encompasses four key areas: exchanges, stablecoin issuers, dealing service providers, and custodians.
Operating on the principle that similar rules should apply to similar risks, this framework aims to facilitate greater use cases for stablecoins and tokenized financial products while maintaining appropriate oversight.
Korean stakeholders showed particular interest in Hong Kong’s innovative financial products, including a recently launched “leveraged inverse product” anchored to a major Korean technology company. This product, described as the first of its kind, restricts trading of related derivatives by Korean investors exclusively to Hong Kong, demonstrating the city’s product innovation capabilities and its potential to serve specialized market needs.
Regional Financial Integration
Beyond immediate investment opportunities, the Hong Kong-South Korea collaboration signals a broader strategic alignment aimed at enhancing regional financial connectivity. Chan’s emphasis on Hong Kong’s role as a “super value-adder” reflects the city’s ambition to become not just a financial hub but a solution provider for economic challenges across Asia and globally.
The partnership comes as both jurisdictions navigate complex geopolitical dynamics while seeking to maintain their positions as regional financial centers. Hong Kong’s pitch to Korean investors emphasized its stability and unique advantages under the “One Country, Two Systems” framework, positioning the city as a reliable bridge for Korean enterprises seeking access to opportunities within China’s Greater Bay Area.
Looking ahead, Hong Kong plans to continue promoting multi-level interactions with different economies across the Asian region, with the Korean partnership serving as a model for future collaborations in digital asset regulation and financial innovation.