Hong Kong is planning a move to unlock a multibillion-dollar capital pool for digital assets and related infrastructure, potentially marking a watershed moment for institutional crypto adoption in Asia.
Hong Kong Insurance Authority (IA) is proposing new rules that would allow the city’s 158 licensed insurers to channel funds into assets, including cryptocurrencies, according to a Dec. 4 presentation seen by Bloomberg.
While the proposal signals an institutional thaw towards crypto, the regulator is still keeping its guard up with a conservative risk framework. The proposal requires insurers to hold a dollar in reserve for every dollar invested in crypto, representing a 100% “risk tax” on direct crypto assets. This is a heavy capital requirement imposed as a buffer against the famous volatility of digital assets.
However, stablecoins will attract risk fees based on the fiat currency they are pegged to, the Bloomberg report said. The Hong Kong Monetary Authority is expected to issue first stablecoin licenses in early 2026.
The industry will not have to wait long for a formal look at the text, as the Danish Insurance Agency will open the proposal to public consultation from February to April 2025, followed by legislative proposals later in the year.
