Hong Kong to Introduce 2026 Legislation Regulating Virtual Asset Dealers and Custodians
Hong Kong plans to introduce legislative proposals in 2026 to regulate virtual asset dealers and custodians. The proposals, which will be submitted to the Legislative Council (LegCo), aim to create a licensing framework for virtual asset dealing and custodial services under the Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Ordinance, aligning them with existing securities dealing requirements.
The Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) recently completed a two-month public consultation that attracted over 190 responses, helping to shape the proposals. In addition, the SFC is consulting on extending its oversight to virtual asset advisers and managers, with comments accepted until January 23.
The proposed custodian regime will focus on securing private keys and protecting client assets, while the dealer regime will meet licensing expectations similar to those for securities intermediaries. This legislative package is part of the SFC's ASPIRe roadmap aimed at improving access to regulated virtual asset markets.
This move highlights Hong Kong's intention to position itself as Asia's crypto hub, in contrast to mainland China's crackdown on cryptocurrencies. Hong Kong has already advanced various regulatory measures, including licensing for over-the-counter (OTC) trading, reviewed derivatives and margin trading, approved staking activities, and has seen spot crypto ETFs trading since 2024.
