SFC greenlights crypto margin lending and perpetual trading in Hong Kong

Hong Kong is widening the scope of regulated crypto activity as its market enters a new phase of development.

The Securities and Futures Commission said on Wednesday it will allow licensed brokers to offer virtual asset margin financing and set out a framework for perpetual contracts on licensed trading platforms.

The changes introduce structured leverage into the city’s supervised digital asset market, but access will remain tightly controlled.

The move forms part of a broader regulatory push aimed at strengthening liquidity, market depth and oversight as Hong Kong advances its crypto policy roadmap.

Margin lending framework

Under the new guidance, licensed brokers may extend virtual asset financing to securities margin clients who meet strict conditions.

Clients must demonstrate sufficient collateral and strong credit profiles.

Initially, only Bitcoin BTC and Ether ETH will be eligible as collateral for margin financing.

The regulator said the initiative will operate within the existing securities margin framework.

This includes controls on collateral quality, concentration limits, haircuts and governance standards.

By anchoring crypto margin lending to established rules, the SFC is aligning digital assets with traditional supervisory structures rather than creating a separate regime.

Perpetual contracts for professionals

The SFC also outlined a high-level framework allowing licensed virtual asset trading platforms to develop leveraged perpetual contracts.

Access to these derivatives will be restricted to professional investors. Retail investors will not be permitted to trade the products under the current structure.

Affiliates of licensed platforms will be allowed to act as market makers, provided they meet conflict-of-interest guardrails, maintain functional independence and implement robust security controls.

The framework is designed to add liquidity mechanisms while keeping risk management and investor protection central to the model.

Liquidity focus under ASPIRe

The measures were discussed during Consensus Hong Kong 2026, where Eric Yip, executive director of intermediaries at the SFC, outlined the regulator’s digital asset strategy.

He said the strategy has entered what he described as a defining stage under the Access, Safeguards, Products, Infrastructure and Relationships, known as the ASPIRe roadmap.

According to Yip, this year’s focus is on liquidity. He said the objective is to cultivate market depth, strengthen price discovery and build investor confidence.

The margin financing plan is anchored to existing safeguards, while the perpetual contracts framework follows a principles-based approach requiring transparent disclosures and strong internal risk management.

On affiliate market makers, Yip said the safeguards are intended to narrow spreads and improve fairness and transparency across trading platforms.

Broader crypto policy rollout

The latest guidance builds on Hong Kong’s wider digital asset regulatory programme.

On Jan. 31, authorities announced plans to submit a draft ordinance in 2026 covering crypto advisory services.

The authorities also plan to share updates linked to the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework.

On Feb. 2, the Hong Kong Monetary Authority said it is preparing to grant its first stablecoin issuer licences in March. Initial approvals are expected to be limited.

Together, the new margin lending rules, the derivatives framework and forthcoming legislation reflect a structured effort to expand crypto activity within a regulated environment while maintaining tight supervision and restricted retail exposure.

The post SFC greenlights crypto margin lending and perpetual trading in Hong Kong appeared first on Invezz