LP has all gone to Hong Kong.

Author: Fu Qisen

While Goldman Sachs is busy reducing its Asian team, DBS Bank has erected a billboard in Hong Kong advertising 'Million Dollar Salary for Wealth Advisors' - in just three months, an 86% growth in performance has made this Singapore bank sense something?

In June 2025, DBS Bank announced that it will add 100 wealth management advisors in Hong Kong over the next three years and plans to establish a brand new flagship wealth center.

This is not a routine expansion of an ordinary bank. DBS Bank is the largest in Southeast Asia and the leading local bank in Singapore, managing assets exceeding $730 billion by the end of 2024. This move seems out of sync—international investment banks are continuing to lay off employees, geopolitical risks are becoming increasingly prominent, and the discourse about Hong Kong's "brain drain and capital flight" has not yet dissipated.

However, it is precisely at a time when market sentiment remains cautious that DBS has chosen to go against the trend, taking decisive actions and maintaining high standards. Not only in terms of manpower investment, but also, its head of North Asia, PANG Huayi, revealed that DBS is preparing to apply for a cryptocurrency service license in Hong Kong to provide local clients with a digital asset allocation channel, and highly praised Hong Kong's "clear and forward-looking" virtual asset regulatory framework.

This is not a conventional business expansion, but a bet on the institutional dividends and future asset structure. The "stablecoin" in the title is just the entry point; the larger chessboard is the financial infrastructure that Hong Kong is building—a new channel that connects offshore RMB, virtual assets, and cross-border wealth management.

DBS is not betting on Hong Kong's present, but on its future as a "on-chain RMB asset hub."

Marching Against the Trend into Hong Kong! What Wealth Code has DBS Sensed?

The expansion of DBS Bank in Hong Kong is not a spur-of-the-moment decision. Over the past two years, it has quietly completed a judgment: the cross-border asset allocation needs of the new wealthy class within China will become the core driving force for the next round of growth in the Asian wealth management market.

Looking back at the capital flow data in Hong Kong from 2023 to 2025, it is not surprising to see DBS's assessment. In 2023, Hong Kong's private wealth management industry achieved a net capital inflow of HKD 341 billion, nearly doubling year-on-year; starting in 2024, Hong Kong's "New Capital Investor Visa Scheme" (CIES) was relaunched, attracting over 1,200 applications in just one year, and is expected to bring in HKD 37 billion in direct investment. After the plan was optimized, the number of applications in March 2025 alone surged by 440%. Behind this intensive application process is essentially a direct vote on the restoration of Hong Kong’s asset platform functions.

For DBS, this data is not a macro reference but direct business feedback. According to Mao Anjie, head of retail and wealth management at DBS Hong Kong, since the beginning of 2024, the wealth management business revenue of DBS Hong Kong has increased by 86% year-on-year, and the proportion of cross-border clients has risen from 20% five years ago to nearly 40%, with expectations to surpass 50% in the next two to three years.

Deeper signs of recovery are also reflected in changes in wealth structure. According to the 2024 industry report jointly released by the Hong Kong Securities and Futures Commission and the Private Wealth Management Association, more than one-third of the surveyed institutions stated that the main source of their new client assets is from mainland China, and this proportion is continuing to rise. Meanwhile, from 2023 to 2024, the total value of cryptocurrency transactions in Hong Kong grew by 85.6%, the highest growth rate in the East Asia region; after the approval of virtual asset ETFs, the willingness of retail investors to participate has also shown a substantial rebound.

DBS's response strategy is clear: not only is it continuously expanding its wealth management center network in Hong Kong, but it has also implemented an internal plan to significantly increase the number of relationship managers, along with the launch of the "real-time foreign exchange trading" feature, allowing 24/7 forex trading on mobile devices to be integrated into the bank's main platform, thereby achieving more flexible cross-border allocation capabilities.

One often overlooked signal is that in May 2024, DBS Bank (Hong Kong) was officially approved to become a member of the interbank foreign currency market of the China Foreign Exchange Trading Center. This means it can directly participate in foreign currency borrowing and repurchase transactions within China, playing a more significant intermediary role in the internationalization of the RMB and cross-border settlement network. DBS has not loudly promoted this progress, but for those familiar with China's funding structure, such qualifications often carry more strategic significance than marketing.

At the same time, senior executives at DBS Hong Kong have confirmed that they are applying for a cryptocurrency service license in Hong Kong. This complements their established cryptocurrency trading platform in Singapore. Pang Huayi, head of DBS North Asia, stated in an interview that the regulations in Hong Kong are clearer and the policies more defined, and in the future, they will provide wealth clients with "a small part of their portfolio in cryptocurrency assets," rather than aggressively entering the virtual currency market—this is a cautious and precise strategy, clearly targeting clients with controllable risks, which aligns with the real demand of high-net-worth clients for "increasing digital asset allocation" while "controlling risk exposure."

In an environment where macro risks remain and capital risk aversion sentiment still exists, Hong Kong, as the "financial bastion," has reconnected the flow of Chinese wealth with global markets, and DBS Bank is one of the first foreign banks to make a strategic response.

**Newly Rich from the Mainland Move South: **A Dual Choice of Risk Avoidance and Reallocation

If the layout of DBS is a forward-looking judgment of trends by an institution, then the scene of a large amount of mainland funds flowing into Hong Kong over the past year is more like a real answer given by the market.

Since 2023, the asset allocation of affluent individuals in mainland China has begun to quietly shift. Influenced by factors such as the sluggish real estate market and declining wealth management returns, traditional asset portfolios are gradually losing their appeal. At the same time, fluctuations in the RMB exchange rate, tightening regulations, and a shrinking channel for domestic and foreign asset allocation have also led many investors to develop new concerns about the safety and long-term stability of their wealth. They are beginning to search for an asset transfer hub that offers both institutional transparency and cross-border liquidity as well as diversified allocation capabilities—Hong Kong has once again entered their field of vision.

The latest data is sufficient to illustrate the issue. In April 2024, after the relaxation of the "Cross-Border Wealth Management Connect 2.0", the net inflow of northbound funds reached HKD 22.3 billion, almost double that of the previous month. In the view of some private banking client managers, this is not just simple arbitrage, but the beginning of "asset reallocation".

Among this group of clients, the fastest-growing segment is not the traditional ultra-high-net-worth individuals, but rather the so-called "high-net-worth individuals"—new middle-class or entrepreneurs with assets between 5 million and 10 million USD. Their wealth is still in the accumulation phase, and they have higher demands for compliance, flexibility, and inheritability of assets, making them a key target for major private banks. The Hong Kong Private Wealth Management Association predicts that in the next five years, this group will increase its share of the client structure from 20% to 28%.

There has been a significant change in the flow of funds. In a low interest rate environment, local banks in Hong Kong once offered a fixed deposit interest rate of 10% annualized yield, becoming an important tool for many mainland investors to hedge against the depreciation of the Renminbi. At the same time, the attractiveness of Hong Kong insurance products continues to rise, driven not only by the level of returns but also by their legality and certainty in cross-border wealth inheritance. Against the backdrop of increasing restrictions on the outflow of assets from the mainland, Hong Kong remains one of the few regions that still has a clear policy space.

The account opening data from major banks confirms this trend. HSBC Hong Kong stated that its number of new accounts in 2023 has more than doubled compared to pre-pandemic levels, with the vast majority being mainland clients; institutions such as Citibank and UBS have also recently increased their resource allocation specifically to serve family offices. Client profiles show that they are more focused on the "structural reallocation" of long-term assets—not on which products to choose, but on how to complete a comprehensive plan in Hong Kong that includes foreign currency assets, tax arrangements, legal structures, and inheritance intentions.

The key to Hong Kong attracting these clients lies in its unique connectivity: it can seamlessly link the RMB and USD systems, while also providing mature trust legal services and an open pool of investment products. In simple terms, it remains the only legal interface that can connect Chinese assets with the global market.

For DBS, the arrival of this new class of "new rich clients" is not a surprise, but rather an opportunity for a new round of customer structure reconstruction. The private banks, such as DBS, are redefining their value chain by shifting from customized management for ultra-high-net-worth individuals to a broader group of high-net-worth clients. Hong Kong happens to provide all the necessary conditions to complete this role transition.

Rebranding Virtual Assets:** Becoming the "New Foundation" for Wealth Management in Hong Kong**

An insider from DBS revealed at this year's Asian Private Banker conference that clients' attention towards virtual assets is gradually shifting from speculative attributes to their complementary potential with traditional asset portfolios. He mentioned not a particular cryptocurrency surge, but rather the advancements in Hong Kong regarding stablecoins, asset tokenization (the so-called tokenization, turning "heavy" assets like real estate, artworks, and even private equity into "digital building blocks" that can be easily circulated on the blockchain) and the ETF system, which is releasing a signal more important than cryptocurrencies themselves - the evolution of financial infrastructure is already impacting the logic of private wealth allocation.

Indeed, from 2023 to 2024, Hong Kong's pace in virtual asset regulation can be regarded as the most systematic and enforceable model in the East Asia region. The most core progress is that in April 2024, the Hong Kong Securities and Futures Commission approved the listing of three spot Bitcoin ETFs, setting a precedent in the Asia-Pacific region. This does not mean that retail investors are rushing to speculate on cryptocurrencies, but rather that institutions and high-net-worth clients finally have access to a traceable, regulated, and compliant channel for digital asset allocation.

Clients have also shown a strong interest in virtual currencies. According to the "2024 Hong Kong Private Wealth Management Report," the total cryptocurrency trading volume in Hong Kong increased by 85.6% in the past year, ranking first in the East Asia region in terms of growth rate. Among clients' interest preferences, the three emerging asset classes of "artificial intelligence," "biotechnology," and "virtual currency" have continued to rise in proportion, indicating that high-net-worth individuals are increasingly focusing on asset allocation beyond traditional assets.

Especially in the current environment of high interest rates for the US dollar, most wealthy clients in Asia have decreased their willingness to allocate to US Treasuries and traditional bonds. They are more inclined to seek asset forms that are more growth-oriented and can, to some extent, bypass the US dollar settlement path. This is precisely why the topic of "stablecoins" has been repeatedly mentioned within private banks like DBS.

It is not because of the fluctuations in its price, but because it serves as a technical intermediary for cross-border settlement, possessing the potential for large-scale transactions that bypass the US dollar and realize offshore RMB pricing. To some extent, the backing of stablecoins is the "new infrastructure" for the internationalization of the RMB.

For example, the Hong Kong Monetary Authority has promoted the establishment of a stablecoin issuance sandbox, clarifying reserve requirements, cross-border redemption rules, and on-chain auditing mechanisms. This provides banks, including DBS, with the technical and compliance space to build their own "digital Hong Kong dollar channels" or "on-chain cross-border asset pools," systematizing, clarifying, and structuring previously fragmented asset allocation activities.

DBS is not a bystander in this matter. Its North Asia Chairman, Poon Hoong Yee, has publicly stated that the clarity of regulation in Hong Kong is a prerequisite for advancing virtual asset services, and they are considering applying for relevant licenses to allow customers to directly access digital assets within the DBS account system. This strategy, while not aggressive, reveals a common judgment among Hong Kong financial institutions: the value of virtual assets is not a new round of speculation, but an extension tool for traditional private banking services.

What is even more noteworthy is that Hong Kong's "stablecoin + asset tokenization + ETF" integrated layout is not just self-talk, but has built a set of regulatory language that is understood, accepted, and even anticipated by international capital. The message it sends to private banks is clear: you can confidently conduct compliant business here and meet client needs, as the regulation will cover you.

In this sense, virtual assets are not the "protagonist" in the title of this article, but they are indeed a key foundation driving the upgrade of Hong Kong's wealth management system. What they carry is the reconstruction of non-U.S. dollar asset allocation channels, and a self-constructed institutional framework for the Asian financial system under the dominance of the U.S. dollar.

Hong Kong Under the Rise of Alternative Assets and Non-Dollar Allocations

High interest rates, dollar fluctuations, and cyclical mismatches are forcing private banks to reassess traditional asset allocation logic. The investment strategy of the golden mix of "60% stocks and 40% bonds"—previously regarded as a robust portfolio template—is gradually losing its effectiveness; the hedging relationship between stocks and bonds is weakening, and more and more clients are starting to introduce more defensive and diversified assets.

James Cheo, Head of Wealth Investments for Southeast Asia and India at HSBC, pointed out at the Global Private Banking Summit that future asset allocations should lean towards "one-third stocks, one-third bonds, one-third alternative assets," with gold, private credit, and private equity becoming core allocation options. International institutions like BlackRock and Morgan Stanley have also elevated alternative assets to a part of their long-term strategic allocations.

This trend is particularly evident in the Asian market. In the face of domestic currency depreciation and declining domestic returns, high-net-worth clients from Southeast Asia and mainland China increasingly prefer to allocate to overseas "certainty assets," such as US dollar gold, euro bonds, offshore RMB products, and Hong Kong insurance. From the perspective of local banks like DBS, this is not only a risk-hedging measure but also reflects a transformation in clients' wealth management from domestic to global allocation.

At the same time, the allocation ratio of RMB assets is steadily increasing among some institutions. Senior executives from CICC, DBS, and others pointed out that with the flow of funds from the "Belt and Road" initiative and the promotion of local currency settlement for infrastructure projects in Southeast Asia, the RMB is gradually becoming an investment option with liquidity and growth potential. DBS is also continuously building a "RMB cross-border ecosystem", establishing a RMB trading network in ASEAN, and launching a round-the-clock foreign exchange matching platform in Hong Kong to provide customized non-dollar allocation paths for clients.

The rise of alternative assets is forcing private banks to restructure their product systems. In Hong Kong, institutions such as DBS, UBS, and HSBC are increasing their investment in research on "marginal assets" such as private equity, trusts, artworks, and stablecoins. Some of these services are attempting to expand to light family offices and affluent middle-class clients—specifically, those with assets in the range of 5 to 10 million USD. Bloomberg data shows that this group’s proportion in the client structure of Hong Kong private banks is on the rise, expected to increase from the current 20% to 28% in the next three to five years.

In a certain sense, wealth management is no longer a game of allocating single currency assets, but rather an adjustment of time zones, systems, currencies, and tools. Gold, private equity, tokenized assets... these once secondary players in the wealth portfolio are now stepping into the spotlight, challenging the dominant position of dollar assets. This signifies that Asian private banks are undergoing a quiet yet profound rebalancing, with Hong Kong still firmly holding the advantage in the tripartite division of Singapore, Hong Kong, and Europe and the United States.

"Offshore Converter": Hong Kong's New Role

The key for Hong Kong today is not how much international capital it can attract again, but whether it can find a way for the renminbi to be accepted by the global financial system.

Whether it is stablecoins or on-chain channels, they are essentially a kind of "technology-based export" — they do not tear apart the boundaries of capital control, but within a regulatory framework, they build a layer of circulation buffer for the Renminbi: funds can enter and exit, paths are compliant and traceable, and for mainland families that are increasingly sensitive to cross-border asset arrangements, this ambiguous yet operable institutional space is the most realistic and useful form of "openness."

DBS Bank has accurately identified this subtle trend. Their strategy in Hong Kong does not focus on the local market, but rather positions itself along an emerging capital path: the overseas asset allocation of middle-class families in mainland China, the offshore liquidity flexibility of the Renminbi, and the rebalancing based on new settlement infrastructure. In the eyes of DBS, the combination of "offshore Renminbi + on-chain assets" is transitioning from a pioneering attempt to a new norm for high-net-worth clients.

So, while the outside world is still debating whether Hong Kong has lost its status as a financial center, DBS and its peers see it is transforming into a more critical role: a "converter"—translating RMB assets into a financial language that the world understands (stablecoins, tokenization, ETFs), embedding itself into the global funding network. If this stepping stone can stand firm, it will not only be a tool for Hong Kong's revival but could also become the next stepping stone for the internationalization of the RMB.