Hong Kong opens crypto market to global liquidation . Photo: Blockworks
Connect to the Order Book
- The Hong Kong Securities and Futures Contract Commission (SFC) has just released two new guidelines that will allow licensed exchanges in the special administrative region to connect to global liquidation sources by Chia Order Book books with overseas platforms.
- Previously, crypto exchanges in Hong Kong operated on a closed model, only matching and clearing orders within the domestic scope. The Order Book connection marks a structural change, allowing buy and sell orders in Hong Kong to be matched directly with orders from international exchanges.
- According to the SFC, this will help local investors access global liquidation more efficiently, with better price discovery and more competitive pricing. Domestic exchanges wishing to implement this model will still need to obtain prior written approval from the SFC to ensure compliance with cross-border Capital flow management and supervision standards.
- In parallel, Token and stablecoins licensed by HKMA Hong Kong do not require a 12-month transaction history as before to be eligible for offering to professional investors.
Hong Kong launches ASPI-Re roadmap
- These changes are part of SFC's strategic framework earlier this year called “ ASPI-Re Roadmap” , which includes 5 pillars:
Access - Expanded access to global markets, including cross-border liquidation connectivity.
Safeguards - Strengthening investor protection and risk monitoring mechanisms.
Products - Allows for expanding crypto product portfolio, from spot to ETFs and Derivative.
Infrastructure - Building more reliable and transparent market infrastructure.
Relationships - Strengthening international cooperation and dialogue with the private sector.
- The roadmap is seen as a guide for the new development phase of Hong Kong's digital asset market, emphasizing trust, global competitiveness and sustainability, according to SFC Chief Executive Julia Leung.
Competitive landscape
- The relaxation comes as Hong Kong is reassessing its legal framework amid escalating global competition, especially under the strategic influence of US President Donald Trump.
- Markets such as the US,Singapore and Dubai are all launching open policies to attract Web3 Capital flows, forcing Hong Kong to take action if it does not want to lose its strategic advantage.
“If regulation is too strict, liquidation and talent will flow to less regulated areas; but if it is too lax, market confidence and stability may be affected,” said Julia Leung in a speech at Hong Kong Fintech Week.
- Although the new policy has been positively received, many experts warn that cross-border risks still exist, including the possibility of money laundering, price manipulation, or massive liquidation reversals.
- Therefore, SFC emphasizes risk management measures in the roadmap, especially the requirement to closely monitor exchanges that are allowed to Chia international Order Book , along with synchronous KYC/AML standards.
- According to Reuters , the Hong Kong government also encourages banks and fintech to invest more than 100 billion HKD (~12.9 billion USD) each year in digital transformation, to support financial infrastructure for the new phase.
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