Today, the Securities and Futures Commission (SFC) announced 12 initiatives to boost the security, innovation, and growth of the virtual assets (VA) market in Hong Kong through regulatory clarity. The new regulatory frameworks for VA over-the-counter and VA custodian services will be developed as VA product and service offerings expand.
According to the SFC, the 12 initiatives will enhance the security, innovation, and growth of Hong Kong’s crypto market under a five-pillar “ASPIRe” roadmap, which stands for Access, Safeguards, Products, Infrastructure, and Relationships. Some of the measures will include optimizing operational requirements for VA trading platforms, fighting illegal activities, investor education, and proactive stakeholder engagement.
The HK SFC said that the initiatives will streamline access to global liquidity, enable adaptive compliance and product frameworks focusing on security, and drive infrastructure upgrades for traditional finance to tap into the efficiency of blockchain.
SFC explores roadmap for new token listings and staking
🚨BREAKING:🇭🇰Hong Kong explores new token listings, derivatives and staking as global competition increases.
— Pushpendra Singh Digital (@PushpendraTech) February 19, 2025
According to Reuters, the HK SFC was expanding the ways investors could trade virtual assets. The HK SFC recently conducted a constructive dialogue with senior management of all licensed virtual asset trading platforms at the inaugural meeting of the Virtual Asset Consultative Panel as part of its engagement efforts under the “Relationships” pillar. As per Reuters, Hong Kong first drew up a plan to become a virtual asset trading center in 2022 – an effort that followed Beijing’s sweeping ban on all crypto transactions in mainland China the previous year.
The SFC said that Hong Kong’s regulations for new token listings were currently quite restrictive, as new tokens, margin trading, derivatives, staking, and borrowing/lending were not permitted. However, the Hong Kong regulator noted that it planned to expand its regulatory framework to facilitate the listing of new tokens exclusively for professional investors. Reviewing existing safeguards for retail offerings was also part of the SFC’s plan.
Staking was another area the SFC planned to study. The regulator said it would explore the establishment of requirements governing the custody of client assets and mitigation of slashing and liquidity risks arising from staking. The SFC added that investors could participate in a core function of crypto through this initiative while benefiting from yield generation, which was unparalleled in the TradFi markets.
“The roadmap is not a final destination but a living blueprint, one that invites collective efforts to advance Hong Kong’s vision as a global hub where innovation thrives within guardrails.”
–Dr Eric Yip, the Executive Director of Intermediaries at SFC
Dr Yip added that the roadmap, which adhered to the core principles of investor protection, sustainable liquidity, and adaptive regulation, was a ‘calibrated response to emerging VA market challenges’ that helped future-proof Hong Kong’s crypto landscape. Hong Kong’s financial secretary, Paul Chan Mo-po, declared at Consensus 2025 that the city will remain a stable, open, and vibrant market for digital assets.
SFC takes notice of interest from institutional investors
According to the SFC, increased institutional adoption was further blurring the lines between crypto and traditional finance (TradFi). The regulator also noted that the global dominance of institutional investors contributing to crypto market capitalization was on the increase. However, differences in regulatory frameworks between major financial hubs such as Singapore, Europe, the United States, and China presented challenges for compliance and market stability.
Romain Pellerin, the CTO of research and development firm Input Output, said that Hong Kong was focused on providing a regulatory framework for crypto assets that promoted growth and responsible innovation and attracted institutional investment. He added that the Hong Kong SFC enabled licensed crypto trading platforms to tap into global liquidity and ‘mimic traditional financial systems’ to build a strong ecosystem.
The Input-Output CTO stated that Hong Kong’s regulatory approach is based on the ‘same activity, same risk, same regulation’ principle. However, regulatory Sandboxes have been set up to allow innovators to test and refine their ideas and get early regulatory feedback. According to Presto Research, Hong Kong has introduced numerous regulatory initiatives to clarify rules on digital assets and create pathways for institutional players to participate and drive industry growth.
Pellerin also said that Hong Kong was committed to supporting the development of the crypto ecosystem and was confident that global companies, institutions, and talent would join forces with them to lead this development. He pointed out that Hong Kong was already investing heavily in related infrastructure and talent development, with Cyberport and Science Park becoming hubs for fintech and blockchain innovation.
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