Hong Kong Eases Crypto Regulations to Boost Liquidity and Attract Global Players
- Hong Kong allows licensed crypto platforms to tap into global liquidity pools.
- New licensing rules ease entry for crypto platforms.
- By 2026, Hong Kong aims to fully license crypto custodians, stablecoin issuers, and dealers.
Hong Kong has recently implemented a notable relaxation of its crypto regulations, signaling a change in its stance to digital assets. On November 3, 2025, the Securities and Futures Commission (SFC) announced new measures that will enhance market liquidity and bring global crypto firms to the region.
Key Changes to Crypto Regulations
One of the most notable changes is the permission granted to licensed virtual asset trading platforms to access the liquidity of their overseas affiliates. Previously, local exchanges were restricted from tapping into the liquidity pools of their global counterparts. This limitation often led to increased volatility and higher costs for investors. With this new policy, Hong Kong investors can now benefit from better pricing and reduced market fluctuations.
In addition to facilitating global liquidity, the SFC has also eased licensing requirements for new crypto platforms. Under the new rules, platforms offering crypto trading, licensed stablecoins, and tokenized stocks to professional investors can operate without meeting the previous 12-month operational track record requirement. This exemption is a significant shift from the traditionally strict guidelines imposed by the SFC.
Modified Licensing for Crypto Custodians
In addition to the modifications to trading platforms, the SFC is implementing a new licensing regime for crypto custody providers. The new license will allow the providers to conduct a wider range of custody services related to digital assets. This is a pivotal step in Hong Kong’s overall plan to enlarge its digital asset infrastructure and bring in a more diverse group of companies.
Hong Kong’s dream to have custodians, stablecoin issuers, and crypto dealers licensed all by 2026 is a clear indication of the direction the SFC is taking. The announcement from the SFC suggests that the changes may open the door for significant players in the crypto market like Binance and Coinbase to come into the region.
Impact on Hong Kong’s Crypto Market
The new rules show that Hong Kong is still trying to be a major player in the world of crypto. The region has been wanting to be a significant crypto center for a long time, and the new rules could help it and other Asian crypto centers like Singapore compare much better.
Hong Kong still has a long way to go before it can reach Singapore in terms of adoption and infrastructure, but the new rules could be the reason why the market will come to Hong Kong. The change is anticipated to not only attract more participants and increase market liquidity but also to enrich the type of digital asset offered in Hong Kong, which in turn strengthens the city’s position in the area.
Hong Kong’s relaxation of the regulations on cryptocurrencies is an effort to pull in global investors while at the same time protecting the local investors. The new rules are going to have a positive impact on market liquidity, innovation, and make the region a worthwhile competitor in the digital assets market.
