Hong Kong to Allow Institutional Crypto Perpetual Futures Under New Rules

• Hong Kong to allow institutional crypto perpetual futures under strict oversight.
• Bitcoin and Ethereum are approved as collateral for broker financing.

Hong Kong is planning to become a leading regulated hub for digital assets. Julia Leung, SFC Chief Executive, speaking at CoinDesk, says that the watchdog will soon publish a high-level regulatory framework that allows licensed trading platforms to offer perpetual futures contracts tied to cryptocurrencies.

Initially limited to institutional investors

Under the upcoming framework, perpetual futures allow traders to speculate on prices without an expiry date. Leung says that initially, it will be allowed only for institutional investors, and platforms must prove they can manage and disclose the risk properly. SFC will remain focused on the fair market rules for the customers. 

On the other hand, regulators will allow brokers to finance the clients using selected digital assets as collateral. As the crypto markets have high volatility, the eligibility starts only with Bitcoin and Ethereum. Borrowers must meet strict credit standards. The regulators are moving cautiously with the most stable and established tokens. 

SFC is also refining the exchanges that want to run market-making operations; they must separate those activities into independent units and maintain clear conflict of interest controls. This is aimed at preventing exchanges that might see the users’ trading activity and can use that information to make money. 

Reason behind this move 

The SFC is trying to balance innovation and credibility. The official wants more sophisticated products and greater participation from global institutions. Instead of approving everything at once, the regulators are widening the access step by step. 

If this move has been implemented, then Hong Kong could attract hedge funds and trading firms that rely on perpetuals and will increase liquidity in local regulated venues. But the regulator’s goal is clear: that innovations will be welcomed within a framework that prioritizes transparency and risk management. 

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