Hong Kong Eases Crypto Rules To Attract Global Liquidity

Hong Kong plans to ease crypto trading rules to let licensed platforms connect with global liquidity pools and encourage more trading in the city.

The Securities and Futures Commission (SFC) said the changes will allow local exchanges to merge their local order books with global ones and expand the range of digital asset products they can offer, including tokenized securities and stablecoins approved by the Hong Kong Monetary Authority.

The moves are part of Hong Kong’s broader push to position itself as Asia’s leading crypto hub while maintaining strict investor protections. The city has already introduced a licensing regime for exchanges and ETF (exchange-traded fund) products tracking Bitcoin and Ethereum.

“Today, we take a significant step to connect with global liquidity,” said SFC Chief Executive Julia Leung. “Making steady strides in market liquidity and business offerings is crucial to sustaining the growth momentum of Hong Kong’s digital asset ecosystem.” 

Crypto Platform Operators Can Connect To Global Order Books

Buy combining local and global order books, the SFC believes that “Hong Kong investors stand to benefit from enhanced market liquidity and more competitive pricing,” while still being protected by “robust safeguards to mitigate additional risks.” 

Previously, orders had to be pre-funded and settled within Hong Kong’s borders. Local crypto platforms that intend to connect their order books will need to obtain written approval from the SFC. 

Crypto Firms Can Offer More Trading Services

The SFC also said that crypto platform operators will be allowed to offer trading in digital assets without a 12-month operating track record, a permission that only applies to professional investors and to stablecoins that are currently licensed by the Hong Kong Monetary Authority (HKMA). 

The SFC is now also allowing the platform operators to distribute tokenized securities as well as other digital asset-related investment products. 

In addition, the SFC said that companies affiliated with those trading platforms can provide customers with custody services for their digital assets or tokenized securities, even if the assets are not listed or traded on the platforms

Hong Kong Ranked Among The Highest In Terms Of Adoption

Hong Kong is currently ranked fifth in the world in terms of crypto adoption, according to the Chainalysis Global Crypto Adoption Index. 

Hong Kong ranks fifth in overall index ranking (Source; Chainalysis) 

Hong Kong has also been on a three-year push to become a regional leader in digital assets, and has so far established a licensing regime for crypto platforms, listed exchange-traded products (ETPs) that track BTC and ETH, and currently oversees crypto funds as well.