The FSTB and the HKMA concluded the first phase of a review of distributed ledger technology in Hong Kong's fixed income market and found the legal and regulatory environment already flexible enough for tokenised bond issuance. The Companies Registry issued FAQs the same day confirming that a register of debenture holders can be kept on a distributed ledger. A second phase in the second half of 2026 will look at legislative changes, including electronic execution of issuance documents and concepts of possession and transfer for tokenised instruments.
Why it matters: Hong Kong is moving from case-by-case issuance to changing the law itself, starting with the property law questions that decide what a token holder actually owns. R.M.
The joint press release reports the first-phase finding: existing law already supports tokenised bonds. It points to three government issuances and a growing number of corporate ones. The review also found “a few legal issues worthy of further clarification and enhancement”.
The first clarification came from the Companies Registry. Its FAQs on tokenised bonds say a tokenised bond is a “debenture” under section 307 of the Companies Ordinance (Cap. 622), so a Hong Kong company issuing one must keep a register of holders (Q2). The register can be kept on a distributed ledger (DLT) as an electronic record if it holds the information section 308(2) requires, can be inspected in Hong Kong, can be reproduced in hard copy, and has safeguards against falsification under section 656(1) (Q3).
The second phase, in the second half of 2026, will consider legislative changes in two areas:
Electronic execution of issuance documents, including electronic signatures for trusts created in tokenised bond and fund issuance.
Concepts of “possession and transfer” for tokenised fixed income instruments.
Implications
The FAQs settle whether the ledger itself can be the legal register, or whether a separate off-chain register has to be kept. A Hong Kong company can now treat the DLT register as the statutory one, provided it meets the inspection and hard-copy conditions.
The second phase is the harder part. A digitally native bond that moves between wallets needs clear rules on who holds it and when a transfer takes effect, especially if the issuer becomes insolvent. The release names the topic but gives no direction. Whether the review creates a new category of property, as the UK did in 2025, or adjusts existing securities law is open.
The FAQs cover only Hong Kong-incorporated companies. Overseas issuers registering bonds through Hong Kong platforms rely on their own corporate law.
Elsewhere in Asia
India’s Demat 2.0 pilot avoids the question by keeping tokenised bonds on the depository’s register.