Hong Kong completes its regulatory framework for virtual assets: what it means for the market

For too long, Hong Kong has left a gap in its virtual asset policies. While retail trading platforms operated under supervision, key industry figures—custodians safeguarding funds and dealers managing large-scale operations—continued to move without definitive guidelines. This scenario has finally changed with the announcement of new regulations.

A comprehensive regulatory system: what Hong Kong and other markets are doing

It’s no coincidence that Hong Kong has decided to act right now. In Europe, Spain has already fully embraced the MiCA framework, setting a strict deadline of July 1, 2026, for crypto companies to comply. At the same time, Russia is implementing a pragmatic system that limits investments by small savers. This global movement clearly signals that the era of deregulation in crypto is over. By 2026, the sector will be highly supervised, and only companies that strictly adhere to the rules will survive.

Hong Kong, unwilling to fall behind, has stepped up its efforts. The Financial Services and the Treasury Bureau (FSTB) and the SFC have concluded consultations on a new licensing regime specifically dedicated to virtual asset dealers and custodians. This is not just a simple update: it marks the completion of the SFC’s ASPIRe roadmap and the transformation of the city’s crypto ecosystem into an infrastructure built on institutional trust.

The guiding principle: “same business, same risks, same rules”

Hong Kong’s motto, which had been almost a slogan for years, is now becoming operational reality. The new licenses are built following exactly the same rigorous standards applied to Type 1 securities rules in the traditional financial sector.

For crypto dealers, this means complying with the same strict standards that characterize conventional finance. For custodians, the challenge is even more complex: they must demonstrate tangible capabilities in securely managing private keys, a fundamental element for protecting clients’ assets. These new regulations do not merely fill a regulatory gap. They govern what could be called the crypto sector’s “invisible infrastructure”: not only the platforms visible to consumers but the entire stack of services supporting every transaction, from custody to execution.

Proactive dialogue as a competitive advantage

A distinctive aspect of Hong Kong’s approach is the early involvement of companies in the regulatory process. Unlike many governments that impose final rules, Hong Kong encourages businesses to engage with regulators before finalization. These “pre-application discussions” provide a significant advantage to pioneers, allowing them to adapt and prepare without late surprises.

This strategy also extends to subsequent phases. The next wave of regulation will target advisors and virtual asset managers, extending the same high standards to those providing consulting and managing capital. The goal is to keep Hong Kong’s entire crypto ecosystem cohesive, balanced, and transparent both technologically and in human decision-making.

Statements from regulatory leaders

Industry regulators have expressed full support for these developments. Julia Leung, Chief Executive of the SFC, emphasized:

“The significant progress in our virtual asset regulatory framework ensures that Hong Kong remains a global leader in the development of the digital asset market, fostering a reliable, competitive, and sustainable ecosystem.”

Christopher Hui, Secretary for Financial Services and the Treasury, added a complementary perspective:

“The proposed licensing regimes strike a prudent balance between market development, risk mitigation, and investor protection.”

Implications for the future

With these new regulations, Hong Kong signals its intention to attract heavyweight institutional investors—those seeking the highest standards of security and compliance. Regulating dealers and custodians is not an obstacle to the market but the foundation for building lasting trust.

The paradigm shift is global and irreversible. As 2026 approaches, jurisdictions that have already built robust regulatory infrastructures will have a significant competitive advantage over those that remain behind.