Hong Kong to License Crypto Service Providers Under New Bill
Hong Kong is taking significant steps to integrate virtual assets into its financial framework. The city plans to introduce a licensing system for crypto custodians, advisers, and other service providers as part of its broader financial-sector development strategy for 2026-2030. Christopher Hui, Hong Kong’s secretary for financial services and the treasury, announced on October 5 that a draft amendment bill would be submitted this year to establish this licensing system.
The move aligns with Hong Kong’s First Five-Year Plan for Economic and Social Development and the 2026 Policy Address, which aim to strengthen the city’s position as an international financial center. Hui highlighted two key strategic shifts: a move from pursuing scale to enhancing functional capabilities and transforming from a financial city to a financially empowered city. This includes leveraging finance to support technology, green initiatives, and people’s livelihoods.
The Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) have signed a memorandum of understanding to oversee licensed virtual-asset providers. Additionally, the Hong Kong Monetary Authority is collaborating on optimizing legal frameworks and offshore renminbi initiatives. The government is also working with technology and telecommunications sectors to combat fraudulent content, including AI-generated material.
Hong Kong’s strategy extends beyond virtual assets. The city aims to strengthen its role as a global offshore renminbi business hub, with plans to introduce a seven-day offshore renminbi liquidity bidding mechanism and study the issuance of offshore renminbi short-term debt instruments. The Hong Kong Stock Exchange will launch an “Offshore RMB Bond Index,” and the government plans to issue more Dim Sum bonds.
In the commodity-trading sector, Hong Kong is focusing on gold, with the Hong Kong Gold Central Clearing and Settlement System set to launch in the first quarter of 2027. The Hong Kong Stock Exchange will also announce details of new renminbi-denominated and physically settled gold futures contracts this year. Hui emphasized the government’s proactive approach to developing new growth points.