Hong Kong’s financial regulator, the Securities and Futures Commission (SFC), announced plans on Wednesday to broaden investor access to virtual asset trading. This move underscores the city’s ambition to become a leading digital asset hub in Asia and attract significant capital inflows.
The SFC intends to implement new licensing frameworks for over-the-counter (OTC) virtual asset trading and custody services. These regulations aim to enhance market efficiency and strengthen investor protection, according to an official statement released by the SFC. The announcement follows remarks made by SFC CEO Julia Leung at CoinDesk’s Consensus Hong Kong 2025 conference.
Beyond OTC trading and custody, the regulator is also evaluating the potential for virtual asset derivative trading and margin financing. These considerations signal a comprehensive approach to developing a robust and regulated virtual asset market in Hong Kong.
Hong Kong’s pursuit of becoming a virtual asset trading center began in 2022, following a comprehensive ban on cryptocurrency transactions in mainland China. Since then, Hong Kong has achieved significant milestones, including the launch of Asia’s first spot crypto exchange-traded funds (ETFs) and the issuance of nine virtual asset trading platform (VATP) licenses, as highlighted by Financial Secretary Paul Chan at the conference.
Furthermore, regulators are making progress in establishing a regulatory framework for stablecoins, introducing legislation to foster innovation in this area. These initiatives collectively demonstrate Hong Kong’s commitment to cultivating a dynamic and thriving digital asset ecosystem, according to Chan.
Adding to the momentum, Bullish Group, the owner of crypto news platform CoinDesk, secured its tenth licensed crypto exchange in Hong Kong on Tuesday. This development further solidifies the city’s growing prominence in the global crypto landscape.
Consensus Hong Kong, a major cryptocurrency industry event, witnessed industry leaders expressing optimism about the evolving regulatory environment. Richard Teng, CEO of Binance Holdings, noted a significant shift in sentiment, particularly among sovereign wealth funds and institutional investors, who are now actively considering the extent of their crypto investments.
Bitcoin’s price surge, more than doubling last year and reaching an all-time high of $109,071 on January 20, 2021, further underscores the growing interest in the crypto market. While the price has since retreated to around $96,000, the overall trend indicates sustained investor confidence.
Hong Kong’s proactive approach to crypto regulation is often viewed as an indicator of Beijing’s evolving stance on virtual assets. This development coincides with the new U.S. administration’s efforts to formulate crypto regulations and potentially establish a national reserve to bolster the industry.
Lawrence Chu, co-founder and CEO of digital asset firm IDA, emphasized Hong Kong’s unique role as a “one country, two systems” model, serving as a sandbox for China and a conduit for various activities, including crypto innovation. This strategic positioning allows Hong Kong to explore and refine regulatory frameworks for virtual assets, potentially influencing future policies in mainland China and beyond. This strategic approach reinforces Hong Kong’s position as a vital bridge between the East and West in the rapidly evolving world of digital finance.
