Hong Kong’s LEAP Digital Assets Policy Statement 2.0 aims to unify licensing and expand tokenized products within a comprehensive regulatory framework. However, Beijing's announcement to liquidate confiscated virtual currencies through Hong Kong's licensed exchanges reveals a strategic intent to position Hong Kong as the leading virtual asset hub. This move aims to inject liquidity into the market, granting Hong Kong significant influence over global virtual asset markets. Established legislative foundations, such as the Anti-Money Laundering Ordinance and the forthcoming Stablecoin Ordinance, enhance this framework. China's strategy to channel seized digital assets will effectively create a market price vehicle in Hong Kong, enabling Beijing to control market liquidity and influence crypto valuations. This approach significantly alters the balance of power in the crypto space, providing Hong Kong and China a unique leverage point compared to the U.S., which maintains a passive 'hold-only' crypto strategy. Consequently, Hong Kong is positioned to attract institutional capital and manage market dynamics with unprecedented agility.

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