Stablecoins are capturing increasing attention across global financial markets, driven by evolving regulatory frameworks and growing institutional participation. With jurisdictions like Hong Kong advancing clear stablecoin regulations and major asset managers exploring blockchain-based financial products, the digital asset ecosystem is undergoing a transformation. At the heart of this shift are fund subsidiaries—particularly those based in Hong Kong—who are actively building infrastructure, testing use cases, and preparing for a future where stablecoins play a central role in asset management and investor services.
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The Rise of Regulatory Clarity
A key catalyst behind the surge in stablecoin adoption is the growing clarity in regulatory oversight. In a landmark move, Hong Kong’s Legislative Council passed the Stablecoin Bill, set to take effect on August 1, 2025. This legislation establishes a comprehensive regulatory framework centered on licensing requirements and a mandatory 1:1 reserve of high-liquidity assets such as cash or short-term government securities. Notably, the framework also explores integrating the Chinese yuan as an eligible pegged currency, aiming to position Hong Kong as a multi-currency stablecoin hub that supports Hong Kong dollars, U.S. dollars, and RMB on-chain.
This regulatory progress has already triggered market reactions. When Guotai Junan International announced it had upgraded its Securities and Futures Commission (SFC) license to include virtual asset trading services, shares of fintech and blockchain-related companies surged. Investors recognized the significance: licensed platforms can now legally offer trading in Bitcoin, stablecoins, and other digital assets, opening new revenue streams and enhancing market confidence.
Fund Subsidiaries Enter the Stablecoin Arena
With clearer rules on the horizon, several mainland Chinese fund subsidiaries operating in Hong Kong have begun laying the groundwork for deeper involvement in the stablecoin economy. These firms are no longer just observers—they are active participants in sandbox trials, product development, and talent acquisition.
One prominent example is China Asset Management (Hong Kong), which has taken part in multiple government-led innovation projects, including the Stablecoin Sandbox, Project Ensemble, and the e-HKD + Pilot (digital Hong Kong dollar initiative). Their involvement spans critical functions such as stablecoin issuance, payment settlement, asset tokenization, and fund subscription/redemption processes—all tested on blockchain networks in collaboration with major institutions like HSBC, Visa, ANZ Bank, and the Hong Kong Monetary Authority (HKMA).
In a recent interview at the China Wealth Management 50 Forum, CEO Kenneth Kam disclosed that China Asset Management has partnered with one of the three approved stablecoin issuers—Circle Innovation Technology, JD Blockchain, or Standard Chartered—to co-develop a cash management solution submitted to the HKMA. The team continues to engage closely with regulators to advance toward live implementation.
“If and when SFC regulations permit,” said Alvin Chu, Head of Digital Assets and Family Wealth at China Asset Management (Hong Kong), “we plan to allow investors to subscribe to and redeem funds using compliant stablecoins. This could significantly boost our fund management scale by improving transaction speed and lowering costs.”
Expanding Into Tokenized Financial Products
Beyond stablecoin integration, these fund subsidiaries are pioneering broader applications of blockchain technology through tokenized asset offerings. In April 2024, Hong Kong launched six spot virtual asset ETFs, including Bitcoin and Ethereum ETFs issued by Bosera International, China Asset Management (Hong Kong), and Harvest Fund International. These ETFs hold actual crypto assets and support both cash and in-kind subscriptions—allowing investors to exchange their existing BTC or ETH directly for ETF shares.
But innovation didn’t stop there. In February 2025, China Asset Management (Hong Kong) launched Asia’s first retail tokenized money market fund denominated in Hong Kong dollars. This marked a major milestone in bringing real-world assets (RWA) to retail investors via blockchain. By tokenizing traditional financial instruments, the firm enables fractional ownership, 24/7 settlement, and greater liquidity—all while maintaining regulatory compliance.
Bosera International followed suit by partnering with HashKey Group to launch tokenized versions of its Hong Kong dollar and U.S. dollar money market ETFs—plans that received SFC approval in March 2025.
These developments signal a strategic shift: from merely offering crypto exposure to reimagining how financial products are structured, distributed, and settled.
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Building Teams for the Digital Future
To sustain this momentum, fund managers are aggressively recruiting specialized talent. For instance, Bosera International recently posted a job opening for a Virtual Asset Product Manager, seeking candidates with at least three years of experience in blockchain, fintech, digital payments, or related fields.
Key responsibilities include:
- Designing and launching virtual asset products
- Managing product lifecycles from concept to retirement
- Researching global market trends and regulatory shifts
- Developing integrated product architectures covering investment, custody, clearing, payment, and yield distribution
Meanwhile, China Asset Management (Hong Kong) has already established a dedicated digital assets division comprising professionals across product development, investment management, operations, compliance, and legal functions. This cross-functional team ensures seamless execution across complex regulatory and technological landscapes.
Frequently Asked Questions (FAQ)
Q: What is a stablecoin?
A: A stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset like the U.S. dollar, euro, gold, or government bonds. It combines the efficiency of digital currencies with price stability.
Q: Why are fund companies interested in stablecoins?
A: Stablecoins enable faster settlements, lower transaction costs, and programmable finance capabilities. They also allow seamless integration between traditional finance and blockchain systems—making them ideal for fund subscriptions, redemptions, and cross-border payments.
Q: What does “tokenized fund” mean?
A: A tokenized fund represents ownership in a traditional financial product (like a mutual fund or ETF) using blockchain-based tokens. These tokens can be traded peer-to-peer, settled instantly, and accessed globally within regulated environments.
Q: Is Hong Kong leading in stablecoin regulation?
A: Yes. With its upcoming Stablecoin Bill and active sandbox programs, Hong Kong is emerging as one of the most forward-thinking jurisdictions globally—balancing innovation with investor protection and financial stability.
Q: Can retail investors use stablecoins for fund transactions today?
A: Not yet widely—but pilot programs are underway. Once full regulations take effect in 2025, licensed platforms may begin accepting compliant stablecoins for purchasing and redeeming funds.
Q: How do stablecoins relate to central bank digital currencies (CBDCs)?
A: While CBDCs are issued by central banks (e.g., digital HKD), stablecoins are typically issued by private entities but must comply with strict reserve and transparency rules. Both aim to modernize payments and can coexist in a layered digital currency ecosystem.
As regulatory frameworks mature and institutional infrastructure strengthens, the line between traditional finance and digital assets continues to blur. With stablecoins acting as a bridge—and fund subsidiaries leading the charge—the next era of finance is not just coming; it's already being built.
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