Hong Kong plans to submit draft amendments to its legislation by the end of 2026 to establish a licensing system covering four virtual asset services. Christopher Hui, Secretary for Financial
Hong Kong plans to submit draft amendments to its legislation by the end of 2026 to establish a licensing system covering four virtual asset services. Christopher Hui, Secretary for Financial Services and the Treasury, said on October 5 that the move responds to the rapid development of fintech and would bring virtual asset trading, custody, advisory and management services under a formal regulatory framework.
The proposed system would extend oversight beyond crypto trading platforms to other businesses involved in the digital asset market.
Source: GovHK
Separately, the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority are studying changes to the legal framework aimed at strengthening fraud prevention. The review will consider how technology and telecommunications companies can improve the detection and removal of fraudulent content, including scams generated or enabled through the misuse of artificial intelligence.
The proposed licensing regime forms part of Hong Kong’s 2026–2030 financial and fintech strategy, with firms providing the covered services expected to obtain registration or licences from the Securities and Futures Commission (SFC). The framework will operate alongside the Hong Kong Monetary Authority’s separate licensing regime for fiat-backed stablecoin issuers.
The market response to Hong Kong’s virtual-asset framework has been largely supportive, particularly among industry participants seeking clearer rules for businesses beyond exchanges. A January 2026 consultation on virtual-asset advisory and management rules received 51 submissions, with the majority of respondents supporting regulation of these activities as a natural progression of Hong Kong’s existing framework.
The positive reaction is also tied to Hong Kong’s growing institutional digital-asset market. Banks in the city held more than $14 billion in digital assets under custody by the end of 2025, up about 180% year over year, while tokenised deposits reached $29 billion. That growth suggests financial institutions are already increasing their exposure to digital assets and could benefit from clearer rules governing the wider investment infrastructure.
Source: Gov HK
Some market participants also see Hong Kong as an increasingly important Asian testing ground for regulated crypto adoption. Solana CEO Joseph Chee recently described Hong Kong as the most open location in Asia for crypto, arguing that its regulatory approach could provide a model for how Chinese crypto activity might eventually develop.
Meanwhile, Hong Kong Financial Secretary Paul Chan has repeatedly positioned digital assets as part of the territory’s wider financial-market strategy. He highlighted the growing interaction between traditional finance and DeFi, as well as the use of blockchain for tokenised assets, while reiterating the principle of “same activity, same risk, same regulation.”
For investors, the potential change is greater access to regulated digital-asset products rather than more crypto companies entering the market. Hong Kong already had 11 spot crypto ETFs by March 2026, with combined market capitalization of about $4.3 billion, showing that regulated investment products are becoming an established part of the market.
The regulatory expansion could also improve the range of professional investment services available around digital assets. Hong Kong’s SFC has already allowed authorized funds to gain direct exposure to spot virtual assets and indirect exposure through products such as futures and exchange-traded products, giving investors alternatives to holding tokens directly.
However, regulation does not remove crypto investment risk. Investors will still face volatility, liquidity and asset-specific risks, while stronger oversight could make poorly governed or non-compliant providers less attractive to the market.
Meanwhile, China’s crypto restrictions are also pushing some industry players toward Hong Kong’s regulated market. Li Lin, founder of former Huobi exchange, now HTX, is moving a trading system and investment team from his family office, Avenir Group, into Hong Kong-listed Bitfire Group. The move is a change from privately operated crypto businesses toward regulated asset-management structures in Hong Kong.
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The post Hong Kong to Introduce Licences for Four Major Crypto Services in 2026 appeared first on DeFi Planet.
