Hong Kong Prepares to Finalize Digital Asset Regulations by 2025

Hong Kong’s Securities and Futures Commission (SFC) has confirmed that a comprehensive regulatory framework for digital assets will be completed by next year. CEO Liang Fengyi made the announcement, highlighting the agency’s dedication to enhancing market oversight while embracing financial innovation. In addition to the regulatory progress, 11 crypto platforms are currently undergoing licensing reviews, with the first phase of assessments already finished.

Strengthening Virtual Asset Regulations

As the SFC marks its 35th anniversary, the agency is focused on maintaining market fairness while advancing the regulation of virtual assets. In a recent interview with Hong Kong 01, CEO Liang emphasized the importance of finalizing the digital asset framework, stating, “The entire framework will be completed at least next year.” The initiative aims to make Hong Kong a leader in financial innovation, focusing on the promotion of tokenization for traditional products and integrating regional blockchain networks and Web3 technologies.

The SFC’s broader goals for 2024 to 2026 include enhancing the global competitiveness of Hong Kong’s capital market, strengthening market resilience, and improving institutional efficiency. These objectives align with the regulatory body’s ongoing efforts to create a robust environment for digital asset trading platforms.

In terms of virtual asset trading, Hong Kong is already making strides. The SFC has granted licenses to three platforms: Hong Kong Virtual Asset Exchange (HKVAX), OSL Exchange, and HashKey Exchange. Liang also disclosed that 11 additional platforms are in the process of applying for licenses, with the first round of evaluations completed. She made it clear that only platforms that meet the regulatory requirements will receive conditional licenses, while those that fall short will not be approved.

In addition to regulating digital assets, the SFC is also developing a licensing system for cryptocurrency over-the-counter (OTC) services. These efforts reflect the commission’s commitment to establishing a secure and regulated environment for crypto trading in Hong Kong.