Hong Kong has announced a significant easing of restrictions for licensed crypto trading platforms. The Securities and Futures Commission (SFC) will allow local exchanges to connect with their global order books. This measure aims to boost market activity and position Hong Kong as a major hub for digital assets. Julia Leung, the SFC’s chief executive, made the announcement on Monday during Hong Kong Fintech Week. A formal circular detailing the new regulatory details is expected.
This new policy, as reported by Bloomberg, marks a fundamental departure from the existing “ringfenced” system. This system limited trades to within Hong Kong. Under the upcoming framework, licensed exchanges will be permitted to link with global liquidity, bringing digital-asset trading rules closer to those governing traditional financial products.
This regulatory update forms part of Hong Kong’s ongoing three-year effort to position itself as a major hub for digital assets. Since introducing its crypto licensing regime, the city has permitted exchange-traded products tracking Bitcoin and Ether. Additionally, it has developed controls for virtual asset funds.
Despite these measures, overall market activity has remained limited. Especially compared to regions like the United States, where authorities have shown increasing openness toward the industry. Leung noted that the commission has taken a cautious approach. However, it will ease restrictions on global liquidity access once it is confident that investor protection measures are sufficient. This demonstrates a balance between innovation and security in market development.
How will this easing affect competition and the entry of major global exchanges into Hong Kong?
Leung also added that the SFC is finalizing guidelines for licensing crypto dealers and custodians. Meanwhile, the Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, is expected to issue the first licenses for stablecoin issuers next year. In a possible next phase, the SFC is also considering whether to allow locally licensed crypto brokers to access international liquidity pools. This change could enable major firms, including Binance and Coinbase, to operate in Hong Kong. They would do so through a broker license rather than a full exchange license. The latter requires a longer approval process.
According to the SFC’s updated circular, licensed exchanges will now be able to list new tokens and HKMA-approved stablecoins for professional investors. This will be done without adhering to the previous 12-month issuance and liquidity track record requirement. Currently, 11 crypto exchanges hold full SFC licenses. Additionally, 49 brokers are authorized to provide virtual asset dealing services under omnibus account arrangements, according to the regulator’s public register. This expansion significantly broadens investment opportunities.
Hong Kong’s decision to ease crypto trading restrictions is a bold step. It could catalyze a surge in market activity. It could also attract more institutional and retail players. This will solidify its position as a leading hub for blockchain and digital finance in Asia.
