Hong Kong's Tokenisation Guidelines, UK Crypto Advertising Rules, Swiss Franc Token Pilot, and Spain MiCA Implementation.
Hong Kong to Issue Guidelines for Tokenisation of Investment Products
The Securities and Futures Commission (SFC) in Hong Kong has issued guidelines for tokenizing investment products authorized under the Securities and Futures Ordinance. Tokenization involves creating blockchain-based tokens to represent ownership of traditional investment products and digitally recording them on the blockchain.
SFC acknowledges the potential benefits of tokenization, including increased product efficiency and reduced reliance on intermediaries. As a result, the SFC is considering allowing primary dealing of tokenized SFC-authorised investment products, such as subscriptions and redemption. To ensure investor protection, the underlying products must meet all applicable authorization requirements and additional safeguards specific to tokenization.
However, the SFC is more cautious regarding the secondary trading of tokenized investment products. It is essential to address factors like instant token ownership record-keeping, trading infrastructure readiness, and ensuring fair pricing. The SFC will work closely with market participants to develop measures that address the associated risks.?
Product providers offering tokenized SFC-authorised investment products must adhere to relevant rules, eligibility requirements, and product codes, including product structure, disclosure, and ongoing compliance. The move reflects Hong Kong's commitment to embracing blockchain technology while ensuring regulatory compliance and investor protection. Market participants will continue collaborating with the SFC to establish a secure and fair environment for tokenized product trading in the region.
UK Financial Watchdog Clarified Crypto Advertising Rules
The UK's Financial Conduct Authority (FCA) has released comprehensive guidance on its crypto advertising regulations, providing much-needed clarity on their implementation after introducing a new promotional regime on 8 October 2023. These guidelines, developed following a consultation period held from June to August, require cryptocurrency firms to include appropriate risk warnings in all communications targeting UK customers with promotional content. They also stress the importance of providing evidence to substantiate any claims made in promotional materials.
The FCA's guidance further specifies how authorized firms engaged in marketing or approving financial promotions should adhere to the Consumer Duty, strengthening consumer protection within the crypto industry.
Despite these regulations, the FCA underlines the high-risk nature of cryptoassets, advising consumers to be prepared for the possibility of losing all their invested funds. To aid consumers in making informed investment decisions, the FCA maintains a Warning List containing details of unauthorized firms, helping individuals identify which entities may be providing or promoting financial services or products in the UK without proper authorization.
Major Banks to Launch Swiss Franc Token Pilot
According to the announcement, the Swiss National Bank (SNB) has partnered with SIX Digital Exchange (SDX) and other 6 prominent commercial banks, which include Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank, to launch an innovative pilot program named Helvetia Phase III. This groundbreaking initiative aims to develop a tokenized version of the Swiss Franc for use as a settlement instrument in digital securities transactions on the SDX platform.
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Helvetia Phase III aims to facilitate the settlement of primary and secondary market transactions using wholesale central bank digital currency (wCBDC) within a live production environment. This will enable banks to issue digital Swiss Franc bonds that can be settled against wCBDC on a delivery-versus-payment basis. The initiative will also extend to the settlement of repo transactions, collateralized by digital bonds eligible for SNB repo transactions and settled on SDX in wCBDC.
This collaboration underscores Switzerland's leading role in digital financial innovation, emphasizing the transformative power of distributed ledger technology (DLT) within the financial system. By employing tokenized central bank money, the project aims to enhance transparency and efficiency within the regulated financial system, potentially reshaping the future of the global financial industry.?
Spain is Expediting the Implementation of MiCA Regulation
Spain is expediting the adoption of the European Union's Markets in Crypto-Assets (MiCA) regulation, aiming to implement it by December 2025, six months earlier than the EU's schedule. This move seeks to establish a stable and secure framework for the cryptocurrency market, providing legal clarity and safeguarding investors.
Once MiCA is published, EU member states must decide on their specific application periods. Spain's decision shortens the transitional phase to 18 months from the regulation's June publication, during which ESMA and the European Banking Authority (EBA) will formulate technical standards. Subsequently, the National Securities Market Commission (CNMV) will have a year to grant authorizations to cryptoasset service providers, enabling earlier supervision.
This acceleration aligns with ESMA's recommendation and bolsters legal certainty and investor protection for Spanish cryptocurrency market participants, impacting firms like Binance, Kraken, and Coinbase, already registered in Spain. MiCA introduces robust consumer protection measures and may apply to new license applicants from late 2026.
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