Hong Kong to Unveil Refined Crypto Regulation in 2025

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

April 7, 2025 02:17 EDT

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Hong Kong will introduce a more detailed virtual asset policy framework by the end of the year, as the city continues to refine its approach to Web3 and related technologies, Financial Secretary Paul Chan said on Monday.

Speaking at the Hong Kong Web3 Festival, Chan said the forthcoming policy statement will expand on the government’s previous commitments, with a focus on using Web3 to enhance traditional financial services, support the real economy and strengthen the application of digital asset technologies.

“Later this year, we will unveil a second policy statement on the development of virtual assets,” he said, adding that the goal is to foster a regulatory environment that supports innovation while safeguarding market integrity.

Policy Rollout Includes Trading Licences and Plans for Stablecoin Oversight

The move builds on the city’s first virtual asset policy, released in Oct. 2022, which set out a high-level framework to support the development of the sector.

Since then, Hong Kong has rolled out a licensing regime for virtual asset trading platforms, with 10 platforms licensed by the Securities and Futures Commission so far.

Other efforts include authorising virtual asset spot exchange-traded funds (ETFs), with Hong Kong emerging as the largest VA ETF market in the Asia-Pacific region. The government also plans to introduce legislation to regulate stablecoins, with the licensing regime expected to take effect within the year.

OTC and Custody Rules Under Review as City Deepens Web3 Supervision

Authorities are currently conducting consultations on extending regulation to cover over-the-counter virtual asset trading and custodial services, further expanding the city’s oversight of the sector.

Chan reiterated that the government’s approach is not solely regulatory. “We support a multi-stakeholder approach where governments, regulators and market players across different territories and regions come together to drive forward the sustainable development of Web3,” he said.

One example is the Hong Kong Monetary Authority’s Project Ensemble, a sandbox that allows financial institutions to experiment with tokenized real-world assets under regulatory supervision.

Hong Kong has taken a more open stance towards Web3 than some neighbouring jurisdictions, positioning itself as a regional hub for blockchain-related activity while maintaining a focus on financial stability.

“The lesson we have learnt,” he said, “is that we need to put it under a balanced regulatory framework so as to enable the sector to grow in a responsible and sustainable manner.”

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