Hong Kong Unveils 2026 Roadmap for Crypto Regulation, Escalating Asia Hub Race

While mainland China is slamming the door, Hong Kong is rolling out the red carpet. Financial regulators in the city have announced plans to introduce a comprehensive legislative bill in 2026 to regulate virtual asset dealers and custodians, cementing its ambition to become Asia's premier digital asset hub.

The Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) said on Wednesday, Dec. 25, that the proposals were developed after a two-month public consultation. The move aims to create a clear licensing framework for virtual asset dealing and custodial services under the city's Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

A New Regulatory Framework for 2026

The proposed rules, shaped by more than 190 public responses, are intended to mirror the existing requirements for securities dealers. The custodian regime will focus on securing private keys and protecting client assets. This initiative is a key part of the SFC's broader ASPIRe roadmap, which is aimed at improving access to regulated virtual asset markets.

The 'Asia Crypto Hub' Ambition

This announcement underscores Hong Kong's strategic push to establish itself as the crypto hub of choice over rivals like Singapore. It's a stance that stands in stark contrast to mainland China's intensifying crackdown on virtual currencies. The city has already been building a crypto-friendly environment, permitting spot crypto exchange-traded funds to trade since 2024 and greenlighting staking services for licensed exchanges.

What's Next for Investors and Firms?

The regulatory scope is set to widen. The SFC also started a consultation to extend its oversight to virtual asset advisers and managers. It's expected to follow a “same business, same risks, same rules” principle, applying standards comparable to those for securities services. The deadline for comments on this proposal is Jan. 23.