On October 31, the Hong Kong Special Administrative Region Government issued a policy statement on the development of virtual assets in Hong Kong today, clarifying the government's policy stance and guidelines for developing a vibrant virtual asset industry and ecosystem in Hong Kong. The policy statement covers the following aspects: 1. Vision and guidelines: Hong Kong is an international financial center and is open and inclusive to innovators engaged in virtual asset business around the world. The government is currently working with financial regulators to create a convenient environment to promote the sustainable and responsible development of Hong Kong's virtual asset industry. We will set the necessary restrictions in a timely manner to mitigate actual and potential risks in accordance with international standards, so that virtual asset innovation can flourish in a sustainable manner in Hong Kong. 2. Supervision: We believe that a consistent, clear and clear holistic regulatory framework will help lay a solid foundation to meet the financial innovation and technological development brought about by the rapid development of virtual assets around the world. While stepping up preparations for the new virtual asset service provider licensing system, we are also happy to contact the global virtual asset industry and invite relevant exchanges to explore business opportunities in Hong Kong. The Securities and Futures Commission of Hong Kong will launch a public consultation on the appropriate extent to which retail investors can buy and sell virtual assets under the new licensing system. The Government welcomes the possibility of introducing virtual asset exchange-traded funds (ETFs) in Hong Kong. The Government is open to reviewing the property rights of tokenized assets and the legality of smart contracts in the future to facilitate their development in Hong Kong. The Hong Kong Monetary Authority will publish the results of the consultation and the next steps on the regulatory regime for stablecoins later. 3. Pilot schemes: The Government and regulators are studying the launch of the following pilot schemes to test the technological benefits brought by virtual assets and try to further apply the relevant technologies to the financial market. These pilot schemes include the issuance of non-fungible tokens (NFTs) for the Hong Kong Fintech Week 2022, the tokenization of green bonds and the digital Hong Kong dollar. 4. Outlook: We will implement the vision set out in this policy statement through accommodative policies, holistic and balanced supervision, risk-based restrictions and various pilot schemes. The Government sincerely invites the global virtual asset industry to work with us to leverage Hong Kong's status as an international financial center, follow the best international standards and practices, and unleash the potential of financial innovation in a clear, flexible and convenient regulatory environment.