Hong Kong is reinforcing its commitment to digital asset regulation, advocating for a "same risk, same regulation" approach at the World Economic Forum (WEF) in Davos. This principle, which guides the city's virtual asset policies, aims to ensure that similar activities in the crypto space are subject to the same rules and oversight as in traditional finance, mitigating risks and fostering innovation.
The WEF has identified 2026 as a crucial year for digital assets, highlighting the convergence of clearer regulatory frameworks, increasing enterprise adoption, and improved interoperability as key drivers. This shift is pushing blockchain technology beyond experimental applications toward becoming a fundamental component of digital financial market infrastructure. In 2025, significant progress was made in digital asset regulation globally, with Hong Kong, Singapore, and the UAE emerging as early adopters, and new regulations introduced for stablecoins in Hong Kong, Europe, and the United States.
Hong Kong's approach involves establishing a comprehensive regulatory regime for digital asset service providers, encompassing exchanges, stablecoin issuers, dealing services, and custodians. The Securities and Futures Commission (SFC) began implementing a regulatory framework for exchanges in June 2023, supervising them as virtual asset trading platforms (VATPs). These platforms must adhere to robust requirements related to consumer protection, market integrity, and anti-money laundering (AML) and counter-terrorism financing (AML/CFT). To date, the SFC has licensed 11 VATPs and is considering 10 more applications.
For stablecoins, the Monetary Authority of Hong Kong (HKMA) is implementing a licensing and supervisory regime that took effect from August 1, after a year-long stablecoin sandbox program that included participants like Standard Chartered Bank. The SFC launched a consultation to bring virtual asset dealers and custodians under the regulatory perimeter to ensure consistent regulatory requirements across all service provider categories.
However, proposed changes to Hong Kong's digital asset framework have sparked concerns within the industry. The Hong Kong Securities and Futures Professionals Association (HKSFPA) has warned that these changes could deter traditional investors from the cryptocurrency market. A key point of contention is the proposed removal of the "de minimis" threshold for Type 9 license holders, which governs discretionary portfolio and asset management. Currently, firms can allocate up to 10% of a fund's gross asset value to crypto assets without needing a specialized license, provided they notify the SFC. The new proposal would eliminate this buffer, requiring a full virtual asset management license for even a minimal 1% allocation to assets like Bitcoin.
The HKSFPA argues that this "all-or-nothing" approach imposes heavy costs and regulatory hurdles, deterring traditional managers from experimenting with the asset class. Legal experts at JunHe LLP noted that the shift would also affect managers operating outside the Type 9 framework, potentially forcing firms managing 100% digital asset portfolios into the regulatory net. The HKSFPA also criticized proposed custody requirements mandating that virtual assets be held exclusively through SFC-licensed providers.
Despite these concerns, Hong Kong is pushing forward with its plans to upgrade its trade ecosystem and embrace digital upgrades across logistics and trade finance. Projects like the Port Community System, launched last week, connect over 2,300 companies and use AI and blockchain to offer real-time cargo tracking.
