HK to expand, open up virtual assets market

Themis Qi

Hong Kong yesterday unveiled a roadmap to expand and grow its virtual assets market on the sidelines of a premier global crypto event under way in the city.

The initiative was announced by Securities and Futures Commission chief executive Julia Leung Fung-yee at CoinDesk's Consensus Hong Kong 2025 conference, with the SFC revealing the roadmap separately later.

Several thousands of chief executives, industry experts and the like are at the three-day flagship cryptocurrency and Web3 event.

Leung told delegates at the conference that the virtual asset market is currently very imbalanced and it is necessary to take a bold but careful approach to further develop the industry.

The SFC's regulatory roadmap named ASPIRe has 12 initiatives that include derivatives and margin lending for some investors.

ASPIRe stands for access, safeguards, products, infrastructure and relationships for investor protection, sustainable liquidity and adaptive regulation, the SFC said.

Under these pillars, the SFC will streamline access to the market by establishing licensing regimes for over-the-counter trading and custody services for virtual assets and attracting global platforms and other stakeholders

The SFC also plans to explore a framework for new token listing and virtual asset derivative trading exclusively for professional investors.

It will explore margin financing requirements that align with securities market safeguards and consider allowing staking - a way of earning rewards for holding certain cryptocurrencies from some platforms - as well as borrowing and lending services with clear guidelines.

Besides, it will explore a "dynamic approach" to custody technologies and storage ratios related to the proportion of cryptocurrencies kept online or offline to prioritize security without hurting issuers' appetite.

Among the other initiatives, the SFC plans to enhance insurance and compensation frameworks, clarify investors onboarding and product categorization, enhance reporting efficiency and strengthen collaboration with agencies and overseas markets.

SFC intermediaries division executive director Eric Yip Chee-hang said the regulator has set no timetable for the roadmap.

Lawmaker Johnny Ng Kit-chong welcomed the roadmap and said it has addressed market concerns.

Ng noted that while Hong Kong has 10 licensed virtual asset trading platforms, even the most active ones see daily trading volumes below US$100 million (HK$780 million) compared to US$5.9 billion on similar exchanges in the United States.

He attributed this to Hong Kong's stricter regulations but pointed out that the roadmap proposes allowing licensed platforms to offer more investment options for professional investors and list more products.