Hong Kong Chief Executive John Lee has announced plans to enhance the regulatory framework for cryptocurrencies and virtual assets in the city. In his policy address to the Legislative Council on Wednesday, Lee stated that the government will support innovative financial services, including central bank digital currency (CBDC) and cryptocurrency trading. "We are testing different solutions and scenarios for digital RMB payments," said Lee. "For virtual asset trading, we are enhancing regulation and considering introducing a licensing regime for virtual asset service providers, regulating virtual asset exchanges, and more." The government will also issue a consultation paper on the regulation of stablecoins this year and introduce a pilot program on tokenized green bonds. These measures aim to strike a balance between fostering innovation and protecting investors, according to Lee. "We will continue to explore the potential of virtual assets and promote their responsible development in Hong Kong," he added.

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