Hong Kong Targets 2026 for Virtual Asset Regulation

Hong Kong Targets 2026 for Virtual Asset Regulation

Hong Kong is set to finalize regulatory proposals for virtual asset dealers and custodians, aiming to present these to the Legislative Council by 2026, according to the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC).

Following a two-month public consultation with over 190 responses, the proposals will introduce a licensing framework for virtual asset services. These regulations will be part of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, echoing current securities trading standards.

With aspirations to become Asia's leading crypto hub, Hong Kong's approach starkly contrasts with China's ongoing crackdown on digital currencies.

In recent developments, the SFC has unveiled new licensing regimes for over-the-counter trading and is reviewing derivatives and margin trading rules. By April, staking services were approved for licensed exchanges under stringent conditions. Spot crypto ETFs have been active since 2024.

The proposed custodian regime emphasizes the security of private keys and client asset protection, while dealer rules are designed to align with securities intermediary licensing expectations. These initiatives are part of the SFC's ASPIRe roadmap, enhancing access to regulated virtual asset markets.

The SFC has also initiated a consultation to extend oversight to virtual asset advisers and managers, adhering to the "same business, same risks, same rules" principle, ensuring standards comparable to securities advisory services. Feedback is expected by January 23.