KPMG: Hong Kong Banks Must Prioritize Digital Asset Capabilities Over Immediate Revenue
Hong Kong banks should focus on building foundational capabilities in digital assets rather than prioritizing immediate revenue generation. According to KPMG’s Hong Kong Banking Report 2026, the city’s financial infrastructure is shifting rapidly following the government’s introduction of a stablecoin framework and its inaugural stablecoin licenses. This transition marks a move from testing environments to real-value settlements. Simon Shum, Head of Digital Assets for Hong Kong SAR at KPMG China, and Antony Ruddenklau, Global Head of Fintech and Innovation at KPMG in Singapore, emphasized that the current priority for banks must be understanding risk and adapting to this evolving landscape to avoid being left behind.
The global footprint of digital currencies is substantial, with the total stablecoin supply approaching US$280 billion in May 2026—predominantly pegged to the US dollar—and transfer volumes hitting $4.5 trillion in the first quarter of the year. Despite the active regulatory environment in Hong Kong, clear business use cases for traditional institutions are still developing, leaving many local and regional banks in a observant, wait-and-see posture. Shum and Ruddenklau noted that establishing digital asset operations demands upfront investment across technology, specialized talent, corporate governance, risk management, compliance, and cybersecurity, which often present as short-term costs rather than immediate drivers of value.
However, the report warns that excessive delay could mean ceding market share to agile fintech firms and new infrastructure competitors. KPMG advises executive leadership to critically evaluate where true client value lies and assess whether existing risk frameworks are prepared for tokenized finance. Rather than waiting for the market to fully mature, banks are urged to build “muscle memory” by assembling the necessary teams, governance structures, and regulatory familiarity required to pivot quickly when mainstream adoption accelerates. Additionally, KPMG suggested that Hong Kong institutions should explore opportunities to leverage the city’s potential as a gold trading hub.
Click here for more on Banking
