Hong Kong plans to finalize proposals to regulate virtual asset dealers and custodian banks and introduce the rules to the city’s Legislative Council in 2026, the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) said on Wednesday.
The proposals, developed after a two-month public consultation that drew more than 190 responses, aim to create a licensing framework for virtual asset trading and custody services. The rules will fall under the order on combating money laundering and the financing of terrorism and reflect existing requirements for trading in securities.
Hong Kong’s government is developing a regulatory environment to promote the development of the city’s crypto industry in a bid to establish it as Asia’s preferred crypto hub ahead of Singapore. Its stance contrasts with that of China, which is intensifying its crackdown on virtual currencies.
In February, the SFC announced new licensing arrangements for over-the-counter trading alongside a review of derivatives and margin trading for virtual assets. In April, it gave the green light to gaming services for licensed exchanges and funds, albeit under strict asset controls and risk disclosure requirements. Spot crypto exchange-traded funds have been trading since 2024.
The proposed custody regime focuses on securing private keys and protecting client assets, while the dealer rules align with licensing expectations for securities intermediaries. Both are part of the SFC’s wider ASPIRe roadmap, which aims to improve access to regulated virtual asset markets.
The SFC also started a consultation to extend oversight to virtual asset advisers and managers. The scheme will follow the principle of “same business, same risks, same rules” and apply standards comparable to those for securities advisory and asset management services, regulators said. Comments must be submitted no later than January 23.
