Hong Kong to allow crypto exchanges to tap global capital pools
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Crypto trading platforms licensed in Hong Kong will be allowed to connect local entities with their global order books.
PHOTO: REUTERS
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HONG KONG – Hong Kong plans to ease rules to encourage crypto trading activity in the city, said its top market regulator.
Crypto trading platforms licensed by the Hong Kong Securities and Futures Commission (SFC) will be allowed to connect local entities with their global order books, said chief executive officer Julia Leung at the city’s flagship Fintech Week on Nov 3.
The change moves from the current ring-fenced model that only matches orders within Hong Kong, and will bring crypto trading in line with local rules that apply to traditional assets.
Hong Kong’s three-year push to become a regional leader in digital assets has so far delivered mixed results. The former British colony has established a licensing regime for crypto platforms, listed exchange-traded products that track Bitcoin and Ether, and oversees digital-asset funds.
But crypto activity remains relatively muted compared with hubs such as the US, where President Donald Trump has embraced the industry.
“You can say we are on the tougher side,” said Ms Leung. “Once we are sure that we are able to protect the investors, we do relax, as we did with the global liquidity.”
The securities regulator is finalising rules for licensing crypto dealers and custodians, and the de facto central bank will hand out the first licences for stablecoin issuers in 2026.
In the next phase, the regulator is also considering allowing locally licensed crypto brokers – as distinct from exchanges – to tap global liquidity pools, Ms Leung said. “That’s for another day,” she added, without specifying a timeframe.
If enacted, it could entice crypto trading giants such as Binance Holdings and Coinbase Global, who would be able to set up shop in the city with a broker licence rather than a full crypto exchange licence, which can take years to obtain.
There are currently 11 crypto exchanges that are fully licensed with the SFC, while a total of 49 brokers are allowed to provide virtual asset dealing services under an omnibus account arrangement, the regulator’s register shows.
Among other relaxations, the SFC said on Nov 3 that locally licensed crypto exchanges can list new tokens and the Hong Kong Monetary Authority-licensed stablecoins for trading for professional investors, without the 12-month track record period of issuance and liquidity requirements. BLOOMBERG
