Hong Kong SFC Weighs Tokenized Gold ETF for Its Next Pilot

The executive director of investment products at Hong Kong’s Securities and Futures Commission (SFC) said a tokenized gold ETF could be the regulator’s next pilot and outlined a pathway linking tokenized funds with digital currencies.

The planned “Innovation Pathway” is intended to improve liquidity and treasury-management efficiency. The first tokenized money market fund has begun secondary-market trading on licensed trading platforms. The SFC previously approved secondary trading for two ChinaAMC tokenized money market funds, marking the first such approval for tokenized public funds on a licensed platform.

Seventeen types of tokenized retail products have been approved for issuance in Hong Kong. The offerings span money market funds, gold products and ETFs, with $1.3 billion in combined assets under management.

The executive director also outlined longer-term plans to expand tokenization to stocks and bonds, explore tokenized assets as collateral, and examine smart contracts for automating investment decisions and trading processes.