The tokenisation of real estate involves creating digital tokens on a blockchain that represent ownership interests (e.g. equity or debt) in physical property. In Hong Kong’s context, tokenised real estate projects must navigate a complex patchwork of securities, land, and anti-money‑laundering laws. The key challenge is that Hong Kong’s existing Securities and Futures Ordinance (Cap.571) treats any token conveying an investment in property as a “securities” offering; likewise, the Land Registration Ordinance (Cap.128) and the still-future Land Titles Ordinance (Cap.585) govern how property ownership is legally recorded. In practice, regulators have signaled that a real‑estate token is essentially a traditional security with a blockchain wrapper, so that all usual licensing, prospectus, custody, and AML rules apply. This thesis reviews Hong Kong’s legal framework for real estate tokenisation, focusing on current laws and guidance, and concludes with how the open-source SQMU tokenisation standard could be implemented compliantly.

Regulatory Authorities in Hong Kong

Hong Kong’s crypto and tokenisation regime involves multiple regulators:

• Securities and Futures Commission (SFC): The primary regulator for securities, futures, and collective investment schemes. It licenses market intermediaries (Types 1–9 under the SFO) and enforces securities laws. The SFC has explicitly stated that tokenised property interests are “fundamentally traditional securities with a tokenisation wrapper” and that existing securities rules (licensing, prospectus, conduct) apply. It oversees offerings and secondary trading of security tokens, and regulates any entity (including crypto platforms) dealing in tokens deemed to be securities.
• Hong Kong Monetary Authority (HKMA): The central bank, which oversees banking, payment systems, and monetary policy. In the token context, the HKMA regulates retail stablecoin issuance under the new Stablecoins Ordinance (Cap.656), and has launched multiple blockchain initiatives (e.g. Project Genesis/Evergreen on bond tokenisation and Project Ensemble sandbox on tokenised payments). The HKMA also issues supervisory guidance on digital asset custody when banks provide custodial or trading services for tokenised assets. For fiat-backed stablecoins, the HKMA issues licenses and AML guidelines; for tokenized securities, it works jointly with the SFC on policy.
• Land Registry (Development Bureau): The Land Registry administers Hong Kong’s land recording system. Currently, under the Land Registration Ordinance (Cap.128), property interests are recorded by deed registration. This system does not support fractional or digital-title interests, meaning blockchain tokens cannot by themselves update legal title. A new Land Titles regime (Cap.585) was enacted in 2004 and finally amended in 2025. Once implemented (targeting “new land first” in 2027), the Title Register will be conclusive evidence of ownership, potentially enabling direct digital registration of tokenised interests in the future. However, until LTO is in force, any tokenised real estate must rely on traditional legal structures (such as shareholding in a property-owning company or beneficial interests in a trust) to link tokens to title.
• Financial Services and Treasury Bureau (FSTB): This government policy bureau oversees Hong Kong’s overall financial and economic policy. In mid-2025, FSTB issued a new policy statement indicating support for tokenisation initiatives and signaling future reforms (e.g. standardizing tokenised bond issuance and reviewing tax/fee structures). The FSTB also jointly consults with HKMA on the stablecoin legal regime.

Other actors include the Hong Kong Exchange (HKEX) for any listing of tokenised products, and licensed trustees/custodians that may hold property or digital assets. But the SFC, HKMA, and Land Registry are the core regulators for tokenised real estate.

Applicable Legal Regimes

Securities and Futures Ordinance (Cap.571)

Under the SFO, many tokenised real estate projects will be treated as securities offerings. If a token conveys profit-sharing or equity in a property, it likely falls within SFO’s broad definition of “securities” (which includes shares, debentures, and interests in companies or schemes). In that case, all the usual rules apply:

• Licensing: Any platform or intermediary dealing in such tokens must hold the appropriate SFC licence. In practice, an exchange trading security tokens would need a Type 1 (dealing in securities) licence and usually a Type 7 (automated trading) licence. Fund managers or advisers on tokenised real estate would need Type 9 (asset management) or Type 4 (advising) licences respectively.
• Offers and Prospectus: Public offers of tokens must comply with Hong Kong’s prospectus regime. This means either obtaining SFC authorization or filing a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32). If a token offering is not SFC-authorized and lacks a compliant prospectus, it can only be made to professional investors or under a specific exemption. In other words, public retail sales of unregistered tokenised property interests are not permitted. All marketing materials and disclosures must meet the same standards as for any securities issue.
• Complex Products and Suitability: The SFC initially viewed tokenised products as complex, but recent guidance clarifies that complexity depends on the underlying asset, not the token wrapper. Thus, a token backed by a simple property fund is treated as a straightforward asset. Nonetheless, intermediaries must still ensure client suitability, perform due diligence on the underlying property or fund, and provide enhanced disclosure of token-specific risks.
• Custody Requirements: Licensed intermediaries must safeguard client tokens under the same principles as other client assets. In March 2024, the HKMA and SFC jointly issued guidelines on custodial services, requiring banks and licensed firms to segregate client assets, implement strong risk controls, and prevent unauthorized use of clients’ digital holdings. For tokenised securities, the SFC specifically advises that custodial arrangements take account of the token’s features (e.g. using multi-signature wallets or qualified custodians).
• AML/CTF Regime: If tokens are deemed securities, transactions also fall under Hong Kong’s AML rules via the SFO (which carries AML obligations for licensed activities) and through the new Virtual Asset Service Provider (VASP) regime. In 2022 Hong Kong amended the Anti-Money Laundering Ordinance (Cap.615) to cover virtual assets. Effective April 2023, cryptocurrency exchanges (i.e. VA trading platforms) must be licensed by the SFC for AML compliance. Notably, the AML law excludes tokens already regulated as securities from the definition of “virtual assets,” but any token trading on an exchange (even if a security) would likely trigger these rules. In practice, a licensed securities broker offering a token market must apply Hong Kong’s KYC and record-keeping requirements.

Anti-Money Laundering (AMLO, Cap.615)

Hong Kong’s AML framework has been updated to cover digital assets. Key points:

• VASP Licensing: The 2022 amendment makes the SFC the AML regulator for Virtual Asset Service Providers. As of June 1, 2023, any platform offering trading of virtual assets must be licensed or registered with the SFC. For tokens deemed securities, this means an SFC-licensed trading venue must offer them. For tokens not classified as securities (e.g. utility or payment tokens), HKMA will eventually require a separate license under the Stablecoins Ordinance (Cap.656) or other AML rules.
• Scope of “Virtual Asset”: The AML law defines “virtual asset” broadly, but excludes government-issued digital currency and tokens already regulated by other laws. Thus, a token representing equity in property (regulated by SFO) is de jure outside the virtual asset definition for AML purposes. However, to avoid regulatory gaps, Hong Kong’s policy moves tend to err on including innovations. In practice, any significant token trading activity (even if a security) would be scrutinized for AML/CTF compliance.
• AML Requirements: Licensed VASPs (including securities token exchanges) must implement customer due diligence (CDD), transaction monitoring, and reporting of suspicious transactions under Cap.615. Trustees and other custodians of digital assets must also adhere to HKMA’s AML guidance.

Land Registration Ordinance (Cap.128)

Hong Kong’s Land Registration Ordinance establishes a deeds-registration system with no state-guaranteed title. Under Cap.128:

• Every disposition of land (sale, lease, mortgage, etc.) is effected by a legal deed that must be lodged in the Land Registry for record-keeping. The register is not conclusive title but provides notice to third parties.
• Co-ownership and Trusts: The LRO permits joint ownership (tenancy in common) but does not record the percentage shares on the register. It also allows interests to be held by trustees or companies. Crucially, the ordinance does not anticipate digital tokens: no provision for registering a blockchain record or fractional interest per se. This means a token itself cannot be entered into the Land Register as evidence of ownership. Rather, any tokenised interest must correspond to some traditional legal arrangement (e.g. a trust or corporate share) that is recorded by deed.
• Implication for Tokenisation: Since the LRO does not support electronic or fractional title, Hong Kong law currently requires an intermediate legal layer. For example, a typical model is that a company owns the property (registered on title), and investors hold tokens that represent shares in that company. Alternatively, a trust deed could hold title and tokens represent beneficial interests. In any case, the underlying title transfer remains governed by LRO deeds. One legal commentary notes that Hong Kong’s current land registration “does not support fractional or tokenised ownership,” forcing projects to use corporate or trust structures.

Land Titles Ordinance (Cap.585)

To modernize real estate law, Hong Kong enacted the Land Titles Ordinance (Cap.585) in 2004. After extensive review and amendments, the government now plans to implement LTO in phases:

• Title Registration: Under LTO, a new Title Register will provide conclusive evidence of ownership for registered land. Once implemented, registered proprietors receive title certificates and no further verification of past deeds is needed. (See Land Registry: “the Title Register will be conclusive evidence of the title to and interests in registered land”.) For tokenisation, this could eventually allow a link between on-chain interests and an authoritative digital title.
• “New Land First” Approach: The amended LTO will initially apply only to new grants and subdivided land (“new land”). Under the “new land first” plan, title registration for new land is targeted to begin in the first half of 2027. If widely adopted, this would modernize Hong Kong’s land system, making it more compatible with digital records in the future.
• Conversion of Existing Land: Eventually there is a plan to convert existing titles from the deeds system to the title system, but that will take years. In summary, before LTO comes fully into effect, a tokenised property interest cannot, by itself, be registered as title. Projects must either wait for LTO implementation or continue to rely on traditional title structures.

Other Relevant Laws

• Electronic Transactions Ordinance (Cap.553): HK’s ETO generally recognizes electronic records and signatures for enforceability. In theory, a smart contract could be an “electronic record” under the ETO. However, in practice, without express legal reform, a blockchain transaction alone does not transfer title to real property. Parties would still need deeds or certified electronic equivalents under LRO/LTO. (The ETO’s principles do support the validity of electronic contracts generally, but tokenisation requires satisfying other property laws.)
• Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32): This statute contains the prospectus regime. Any public offer of tokenised shares or interests must comply with the Cap.32 requirements (including a compliant prospectus).
• Trustee Ordinance (Cap.29): If tokens represent a trust interest in land, then trust laws apply to protect the beneficial owners. Trustees dealing with token transfers would still have fiduciary duties, etc.
• Others: If tokenisation involves fundraising, Companies Ordinance and fundraising rules apply. If derivatives are created on tokens, the SFO’s regime for futures and options could even apply. Stamp duty on property transfers is also worth noting: currently HK imposes stamp duty on conveyances of Hong Kong property and on transfers of Hong Kong stock. Authorities have not expressly addressed whether token trades trigger stamp duty, but a prudent project would assume so (either as a stock transfer duty or conveyance duty) and factor that in.

Recent Regulatory Guidance and Initiatives

Hong Kong regulators have issued several key guidance documents and project announcements related to tokenisation:

• SFC Circulars (Nov 2023): In late 2023 the SFC released two major circulars. The first, “Circular on tokenisation of SFC-authorised investment products”, sets out rules for funds, bonds, or other investment products converted into tokens. It emphasizes that product providers remain responsible for the tokenisation arrangement, must keep full records of token holders, and must not use public permissionless blockchains without additional controls. It also requires issuers to obtain satisfactory legal opinions on the token structure and to disclose detailed information in offering materials (e.g. finality of on-chain settlement). The second, “Circular on intermediaries engaging in tokenised securities-related activities”, provides guidance for brokers, exchanges, and advisers dealing in tokenised securities. It confirms that tokenised securities are to be treated as traditional securities under SFO. Key highlights include: intermediaries must conduct due diligence on both the underlying asset and the DLT technology; custodians must address on-chain and off-chain risks; and that an issuer’s or vendor’s smart contract failures must be mitigated by business continuity planning. Notably, the SFC has removed its earlier blanket PI-only rule: retail clients can now access tokenised securities provided the public-offering rules are observed.
• SFC–HKMA Joint Circular (Oct 2023): On 20 October 2023, the SFC and HKMA updated their joint guidance on virtual asset activities. Among other things, it allows licensed intermediaries to extend virtual asset trading and advisory services to retail investors (subject to suitability controls) – a shift from the previous PI-only standard. This signals a more liberal approach to crypto and token assets in Hong Kong’s regulated market.
• HKMA Project Ensemble (2024–): In August 2024, the HKMA launched Project Ensemble Sandbox. This is a controlled environment for banks to experiment with wholesale tokenised money (e.g. tokenised deposits and a prototype wholesale CBDC) and test end-to-end delivery-versus-payment (DvP) settlement for tokenised asset transactions. The initial use cases focus on traditional and real-world assets (bonds, funds, etc.). In November 2025, HKMA announced Ensemble^TX, the next phase moving from proof-of-concept to real-value settlement (e.g. tokenised money market funds). Throughout, HKMA stresses working with the SFC – this indicates regulators see tokenised asset infrastructure as a future core market component.
• Tokenised Government Bonds: As part of Project Genesis/Evergreen, the Hong Kong government pioneered tokenised bond issuance (e.g. the first tokenised green bond in Feb 2023). These efforts serve as proof-of-concept that blockchain can support regulated financial products. The HKMA published a “Bond Tokenisation in Hong Kong” report (Sept 2023), underscoring that even sovereign issuers are willing to embrace tokenisation with proper safeguards. The lessons from these bond projects inform how real assets might be treated.
• Stablecoins and CBDC: Hong Kong is also developing a framework for digital currency. The new Stablecoins Ordinance (Cap.656) came into force on 1 Aug 2025. It regulates issuers of fiat-backed stablecoins (called “Specified Stablecoins”), requiring HKMA licensing and reserve backing. Under this law, stablecoins used for payment (including potentially tokenised property purchases) must be fully backed and supervised, and HKMA has issued accompanying AML guidelines for stablecoin issuers. Separately, HKMA has explored an “e-HKD” (tokenised bank deposits for general use) as part of Project Ensemble. In summary, tokenised payment media will be tightly regulated, but they are being integrated into Hong Kong’s financial architecture.
• Sandbox and Innovation Programs: Hong Kong has an established Fintech Supervisory Sandbox (HKMA) and Regulatory Sandbox (SFC) to allow controlled trials of new models. Real estate tokenisation could be tested under these initiatives. For example, the Sandbox’s first phase explicitly included real estate assets. Ongoing industry consultations (e.g. on banks’ digital custody services) show regulators encouraging innovation under supervision.

Implications for Tokenised Real Estate Projects

Given the above framework, tokenised real estate offerings in Hong Kong face the following implications:

• Issuance and Offering: If a token represents an ownership or profit interest in property, the SFC will treat it as a security. Any public offering of such tokens must therefore comply with the prospectus regime. This generally means preparing a formal prospectus (or exemption) and obtaining SFC authorization if required. Unlicensed public sales are limited to professional investors. If the tokens are issued as part of a collective investment scheme (e.g. a tokenised property fund), full CIS regulations apply. In practice, most projects structure token sales to professional or institutional investors to simplify compliance, or use the private placement route. The SFC expects product providers to remain fully responsible for the tokenisation process (including all outsourced tech), and to seek legal advice to ensure the token structure aligns with current laws.
• Custody and Record-Keeping: Token custody is a high priority. Intermediaries are advised to hold tokens in recognized secure wallets or custodial accounts. Banks and licensed brokers providing custody must follow HKMA/SFC standards: segregate client tokens, implement strict access controls, and maintain detailed records. In particular, HKMA’s February 2024 circular mandates that client digital assets (including security tokens) be kept in separate client accounts and never used or encumbered by the custodian except to settle client transactions. For projects using SQMU or similar smart contracts, the custodial logic can enforce restrictions (for example, SQMU’s trade contract can restrict transfers to approved, KYC-verified wallets). In any case, token holders’ ownership interests must be recorded off-chain in legal books or registers; the on-chain ledger alone is not legally authoritative.
• Secondary Trading: Post-issuance, any trading of tokens is subject to Hong Kong’s securities trading laws. Trading platforms must be SFC-licensed (Type 1/7) if dealing in security tokens. Peer-to-peer transfers (e.g. using only smart contracts) could breach licensing rules unless an exemption applies. In practice, tokenised real estate is likely to trade only on regulated venues. The SFC expects those venues to apply AML screening on participants and to ensure tokens are not “bearer instruments” on anonymous blockchains. Until fully regulated token trading platforms exist, many projects rely on private placement or invitation-only secondary trades among accredited investors.
• Legal Enforceability: Currently, Hong Kong law does not recognize a blockchain token as legal title to land. The Land Registry will not register a token or change title based on a smart contract. Therefore, token transfers must be accompanied by the traditional legal conveyance (or share transfer) under Cap.128. In effect, a token is a contractual right, not a deed. One review explains that “smart contracts used in tokenised transactions must be backed by enforceable legal documentation”. In other words, an investor’s on-chain token must correspond to an off-chain legal interest (for instance, a share certificate or trust deed) for the token to have legal effect. Until the Land Titles system is operational, token projects typically use companies or trusts as intermediaries. Once LTO is implemented, there may be scope to link tokens more directly to property registers, but that remains a future development.
• Compliance and Disclosure: Even though tokens are digital, offering documents must fully disclose how they work. The SFC insists on clear disclosure of token-specific factors: whether settlement is on-chain or off-chain; any transfer restrictions; whether a smart contract audit has been done; and the nature of the legal title behind each token. Projects should include such information in the prospectus or offering circular. They should also disclose all additional technical and operational risks (cybersecurity, forking, third-party service providers). In sum, the regulatory stance is technology-neutral: tokenisation cannot evade legal requirements by calling a security a “token.” All standard investor protections (suitability, risk warning, etc.) still apply.
• AML/CTF Controls: Tokenised real estate offerings will be subject to Hong Kong’s AML laws. Offerings may require CDD on subscribers and monitoring of token flows. Trading platforms must conduct AML/KYC on users. HKMA and SFC have emphasized that AML/CFT obligations remain in force for on-chain asset transfers. For example, HKMA’s custody guidance states that any delegation of custody (even to a blockchain custodian) requires client due diligence and risk assessment. Thus tokenisation initiatives must build in identity and compliance checks at the issuance and transfer stages.

Forward-looking Developments

Hong Kong is actively developing its tokenisation and digital asset framework. Notable upcoming changes include:

• Land Titles Ordinance (Cap.585) Implementation: The amended LTO will roll out on a “new land first” basis, expected in 2027. Over time, this will simplify title transfer (no need to re-prove past deeds) and introduce digital lodgement of deeds. In the long run, LTO may enable new models for digital property representation. However, projects should not rely on LTO being available in the immediate future – for now the deeds system still governs the vast majority of titles.
• Regulatory Sandboxes: Hong Kong’s Fintech Supervisory Sandbox (HKMA) and the SFC’s regulatory sandbox provide opportunities to pilot tokenisation use cases under regulator supervision. The HKMA has indicated that real estate asset tokenisation (and related applications like blockchain-based mortgages or billing) can be tested in these sandboxes. Any such sandbox experiment would still require compliance with existing laws, but regulators may waive certain requirements for test scenarios.
• Expanded Regulatory Scope: The government has signaled intent to broaden regulation around tokens. For example, regulators are considering how to bring any peer-to-peer token trading under a broader SFO remit. Policy papers also suggest looking at stamp duty, tax, and other legal adaptations for digital securities. The SFC/HKMA updates in late 2023 opened retail participation in tokens, and further consultations (e.g. on permitting wider VATP operations) are expected. Overall, Hong Kong’s approach is pragmatic: codify innovation within the existing legal framework rather than creating a wholly new token law.
• Stablecoins and CBDC: With the Stablecoins Ordinance in force (Aug 2025) and HKMA research into an e-HKD, tokenisation projects should be mindful of future payment system evolutions. A tokenised property offering might choose to settle in HKD via licensed stablecoins or, eventually, via tokenised bank deposits. In any case, if token payments use a central bank digital currency (or its proxy), settlement finality and integration with Hong Kong’s payment rails will be assured.
• Digital Asset Custody Standards: HKMA is finalizing guidance for banks on custody of digital assets. Early drafts and consultations indicate that banks will be expected to meet high standards (segregation, security, governance) when holding customer crypto or token assets. Tokenisation developers should monitor these developments: a compliant project may ultimately partner with banks or licensed custodians to hold investor tokens.

Incorporating SQMU Within Hong Kong’s Rules

The SQMU (Square Meter Unit) standard is an open-source protocol for representing real estate on blockchain. It enforces 1 SQMU token = 1 square metre of a specified property and includes smart contracts for issuance and trading. To align SQMU with Hong Kong’s regulations, the following considerations apply:

• Token Structure: SQMU uses an ERC-1155 token (“Ownership Ledger”) with a fixed supply equal to the property’s certified area. This fixed supply and public code allow regulators to verify that tokens cannot be inflated beyond the property size, meeting the SFC’s demand for transparent, immutable rules. The token contract itself should also include permissions or restrictions (as SQMU’s design does) to prevent unchecked transfers.
• Issuance (AtomicSQMUDistributor): The SQMU protocol features an Atomic Distributor contract that handles primary sales with on-chain payment and token transfer happening atomically. This DvP-like mechanism is helpful: regulators favor atomic settlement to eliminate counterparty risk. When implementing SQMU in Hong Kong, the primary issuance must still be accompanied by traditional legal documentation (a share certificate or trust deed). In other words, the “Buy Now” blockchain function would be the economic closure, but legal title transfer would be effected off-chain via the entity holding title. Offering documents must explain whether settlement is final on-chain or requires off-chain steps. SQMU’s atomic model simplifies this by ensuring if on-chain payment succeeds, the token is delivered immediately.
• Trading (SQMUTrade): SQMU’s secondary market contract allows peer-to-peer trading and is designed to enforce compliance rules. For example, it can restrict transfers only to “approved wallets”. This feature is highly relevant: it means the issuer can require each wallet to be KYC’ed or licensed before receiving tokens. Such whitelisting aligns with the SFC’s view that token transfers should not be anonymous or bearer-form. In practice, a compliant implementation would pair SQMUTrade with a registry of investor identities. The code comments even mention enforcing “approval” checks on each transfer. This technical gating helps satisfy AML and investor protection rules. If desired, SQMUTrade could also record additional metadata (e.g. investor classification) alongside each transfer to assist audit.
• Custody Integration: SQMU does not mandate a specific custodian model, but it can coexist with Hong Kong’s custody standards. For institutional investors, token holdings could be held by a licensed trust company or in a regulated custody platform. Because the SQMU token is ERC-1155, it can be stored in any compliant wallet or smart contract; a bank acting as custodian would meet the HKMA’s requirements by segregating client tokens and securing the private keys (per). If SQMU tokens trade on any platform, that platform must itself be licensed (Type 1/7 if dealing in these tokens). Notably, the open-source nature of SQMU means an Authorized Institution could even use SQMU contracts in its own custody system and still comply with HKMA governance standards.
• Legal Wrapping: SQMU does not replace Hong Kong legal instruments. A fully compliant deployment would have a Hong Kong-incorporated SPV or trust hold the land title, with SQMU tokens representing shares or interests in that entity. The issuance process would involve a legal subscription agreement incorporating the smart contract mechanics. Regulators will expect a legal opinion confirming that this structure complies with HK law. Because SQMU’s code is open and auditable, legal reviewers can examine exactly how ownership ratios and transfers are enforced.
• Risk Controls and Disclosure: The SQMU smart contracts should be accompanied by full audits and robust risk management plans, as mandated by the SFC. In a Hong Kong offer, issuers should disclose that smart contracts have been audited (or if not, manage that risk), explain custody arrangements, and describe contingency plans for technical failures. For example, SQMU issuers could document what happens if the Ethereum network forks or the contracts need an emergency stop. These safeguards will satisfy the SFC’s demand for business continuity planning around tokenised assets.

In summary, the SQMU standard’s architecture can be adapted to Hong Kong’s regime by combining its open smart contracts with the requisite legal framework. Key compliance points include: whitelisting participants in the contract (to meet SFC/KYC rules), ensuring token transfers trigger off-chain title changes under the LRO/LTO, and maintaining complete audit trails of token holders. By design, SQMU’s one-square-meter-one-token rule prevents dilution and provides clear economic meaning, which aligns with regulators’ calls for transparency. If SQMU tokens are only issued by an authorized entity (such as an SFC-licensed fund manager or a Hong Kong company) and if all offerings are structured under SFO-compliant prospectus or exemption, then the protocol can operate within Hong Kong law. Furthermore, using a regulated settlement currency (e.g. an HKMA-licensed stablecoin or tokenised HKD deposit) would complement the AtomicSQMUDistributor’s on-chain DvP model.

In conclusion, Hong Kong’s current laws do not explicitly forbid real estate tokenisation, but they impose the full set of existing financial and land regulations on any such project. Tokenisation in Hong Kong must be built as regulated securities offerings with careful legal design. The open-source SQMU approach offers technical features (fixed supply, auditable code, transfer restrictions) that facilitate compliance. However, it cannot replace the need for licensed intermediaries, disclosure, and legal deeds. A successful HK project using SQMU would effectively use blockchain as a database underpinned by Hong Kong’s traditional legal structures and supervised by the SFC and HKMA at every stage.

Sources: Authoritative analyses and official documents including SFC circulars and HKMA guidance