Hong Kong could potentially double the size of its fund industry by moving from legacy infrastructure to token-based finance, according to a whitepaper from Boston Consulting Group (BCG) and Aptos Labs, with contributions from Hang Seng Bank.
The report, Digital Money: A Chance for Hong Kong’s Fund Industry to Double Up, draws on results from Phase 2 of the e-HKD Pilot Programme under Project e-HKD+.
The pilot showed strong investor demand for features offered by digital money, including 24/7 trading access.
Traditional “message-based” settlement systems rely on intermediaries updating separate ledgers with instructions.
Token-based finance differs. It embeds value, ownership, and compliance logic directly into digital tokens. This allows assets to settle instantly and securely on a shared ledger.
“We have the technical proof and the commercial validation,”
said David Chan, Managing Director and Partner at BCG.
“Investors are ready to increase allocations as soon as the market removes the friction. Financial institutions must now move beyond pilots. Institutions that integrate these features into their core business will capture this new capital.”
The pilot, a collaboration between BCG, Aptos Labs and Hang Seng Bank, used digital money, including hypothetical e-HKD and tokenised deposits, to settle tokenised fund transactions on a public-permissioned blockchain.
It identified compliance readiness, functional capabilities, and commercial viability as key factors for adoption.
Blockchain technology can meet institutional standards for security, privacy, and compliance. It can also reduce counterparty risk and operational costs.
“We believe that blockchain has its biggest impact when it works quietly in the background as infrastructure people and institutions can rely on,”
said Solomon Tesfaye, Chief Business Officer of Aptos Labs.
A survey of 500 retail investors found 61% would double allocations to tokenised funds, while 97% expressed interest in digital money features.
The report advises coordinated action to accelerate technology adoption, ensure regulatory readiness, and foster business-model innovation.
Featured image credit: Edited by Fintech News Hong Kong, based on image by freepik