FSTB and Hong Kong's SFC have completed the consultation phase on a licensing framework for crypto asset businesses, adding to a comprehensive regulatory system encompassing stablecoins and Tokenize with 11 already approved exchanges.
Hong Kong continues to strengthen its position as a regional digital asset hub through the development of a robust legal framework. The Financial Services Bureau (FSTB) and the Securities and Futures Contract Commission (SFC) announced the conclusion of consultations on a new licensing mechanism. Accordingly, businesses providing trading or custody services for virtual assets in Hong Kong will be required to apply for licenses once the official legal framework comes into effect.
This move expands the special administrative region's existing crypto asset management system. In early 2025, Hong Kong launched Stablecoin Ordinance, establishing a separate licensing mechanism for stablecoin issuers. The city now mandates licenses for crypto exchanges, evolving from a voluntary framework introduced in 2020. The SFC has approved 11 companies under this mechanism.
Comprehensive strategy for developing a digital asset center.
Hong Kong leverages its strategic location as a financial gateway connecting mainland China to global Capital markets, along with a business-friendly tax regime, to build a cryptocurrency ecosystem. Regulators recognize that licensing for trading and custody services is a key component in a comprehensive digital asset management framework, alongside stablecoins and tokenization.
SFC CEO Julia Leung emphasized that developing a regulatory framework helps Hong Kong maintain its position in the global digital asset market by “promoting a trustworthy, competitive, and sustainable ecosystem.” The Special Administrative Region is also experimenting with tokenization initiatives, expanding the application of blockchain technology in traditional finance.
The SFC also released a new consultation document on the licensing mechanism for providers of crypto asset advisory and management services. The document links the proposals to the existing Anti-Money Laundering (AML) framework and the Counterterrorism Financing Ordinance, clarifying how to bring crypto asset advisory and management activities under regulation. The consultation process calls for input on the scope of licensing, regulatory authority, sanctions, and appeals mechanisms – key elements in finalizing the proposal.
