New licensing framework aims to strengthen crypto oversight and investor protection
Hong Kong is moving closer to a comprehensive regulatory framework for the digital asset sector. Regulators have confirmed plans to introduce new legislation in 2026 covering virtual asset dealers and custodians, reinforcing the city’s ambition to become a leading regulated crypto hub in Asia.
Following a two-month public consultation with more than 190 submissions, authorities plan to submit a bill to the Legislative Council next year. The proposal will establish a mandatory licensing regime for firms providing virtual asset dealing and custodial services, anchored under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
The framework is designed to mirror regulatory standards applied to traditional securities intermediaries, ensuring consistent oversight and compliance expectations across financial markets.
The proposed custodian regime emphasizes secure management of private keys and strict client asset protection. Dealer rules will align virtual asset trading platforms with existing licensing obligations seen in securities markets, including operational controls and governance standards.
With regulated staking, spot crypto ETFs, and OTC trading already permitted, the 2026 legislation marks a critical step in Hong Kong’s long-term digital asset strategy, offering greater clarity for institutions and investors alike.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.