Hong Kong Regulators Target 2026 Legislation for Virtual Asset Dealer and Custodian Rules
The Hong Kong Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) plan to introduce legislation in 2026 to regulate virtual asset dealers and custodians. This legislation aims to create a licensing regime under the Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Ordinance, mirroring the regulatory framework for securities dealing.
The proposed legislation will be submitted to the Legislative Council in 2026 following a two-month public consultation that received more than 190 responses. Additionally, the SFC is currently consulting on extending regulatory oversight to virtual asset advisers and managers, with consultation comments due by January 23.
The custodian regime will focus on safeguarding private keys and protecting client assets, while the dealer regime will align licensing standards with those applicable to securities intermediaries. These regulatory efforts are part of the SFC's ASPIRe roadmap, which seeks to enhance access to regulated virtual asset markets.
Hong Kong aims to establish itself as Asia's crypto hub, a strategic contrast to China's ongoing crackdown on virtual assets. Previous steps taken include the implementation of over-the-counter licensing regimes, reviews of derivatives and margin trading, approval of staking arrangements, and the introduction of spot exchange-traded funds (ETFs) since 2024.
