Hong Kong will introduce licensing regimes for crypto custodians and dealing platforms, issue its first stablecoin licenses next month, and implement OECD tax reporting standards for digital assets, Financial Secretary Paul Chan announced Wednesday in the city’s 2026–27 budget speech, the most concrete regulatory rollout the city has produced since establishing its virtual asset framework.
Officials say the reforms aim to reinforce Hong Kong crypto regulation as part of the city’s ambition to remain a leading global digital asset hub.
The announcement follows Hong Kong’s second policy statement on digital assets and reflects what authorities describe as a transition from framework-building to practical deployment.
For crypto investors and policy watchers, Hong Kong crypto regulation now appears to be moving into a more mature and enforceable phase.
Hong Kong crypto regulation broadens licensing perimeter
A central pillar of the latest Hong Kong crypto regulation package is a bill to be tabled this year establishing licensing regimes for digital asset dealing platforms and custodian service providers.
The move will expand oversight beyond exchanges, bringing a broader range of intermediaries within the regulatory perimeter.
Chan said the government aims to create a “comprehensive regulatory framework” that balances innovation with investor safeguards.
“We will table a bill this year to establish licensing regimes for digital asset dealing platforms and custodian service providers,” — Paul Chan, Financial Secretary, Hong Kong, in the 2026–27 Budget speech.
The expanded Hong Kong crypto regulation framework builds on the existing virtual asset service provider regime overseen by the Securities and Futures Commission (SFC).
By extending licensing requirements, authorities seek to close potential supervisory gaps and provide greater clarity for institutional participants entering the market.
For market participants, this signals that Hong Kong crypto regulation is shifting from selective oversight toward a more holistic compliance structure, aligning with global regulatory trends.
Stablecoin licensing enters implementation phase
Another key component of Hong Kong crypto regulation is the formal rollout of a licensing regime for issuers of fiat-referenced stablecoins.
Chan confirmed that the regime has been implemented and that the first batch of licenses is expected to be issued next month.
Authorities indicated they will collaborate with approved issuers to explore “compliant, risk-controlled use cases,” marking a pivot from high-level policy design to real-world adoption.
The emphasis on controlled deployment underscores the government’s intent to ensure that stablecoin activity under Hong Kong crypto regulation does not undermine financial stability.
The SFC will also take steps to deepen liquidity in the city’s digital asset market, particularly for professional investors.
“The SFC will broaden the range of products and services available and launch an accelerator program to fast-track innovation within regulatory guardrails,” — Securities and Futures Commission, in its policy outline accompanying the Budget.
For crypto investors, the stablecoin rollout represents one of the most concrete manifestations of Hong Kong crypto regulation to date, potentially positioning the city as a regulated gateway for tokenized payments and settlement solutions in Asia.
Tokenization and tax transparency reforms
Beyond licensing and stablecoins, Hong Kong crypto regulation is expanding into tokenization and tax reporting reforms.
The government will publish guidance clarifying that debenture holder registers can be maintained using distributed ledger technology (DLT), a move designed to legitimize blockchain-based record-keeping in traditional capital markets.
Officials are also exploring the use of electronic signatures for bond issuance documents and the digitalization of bearer bonds, further integrating tokenization into mainstream finance under Hong Kong crypto regulation.
On the tax front, the government will amend its Inland Revenue Ordinance to implement the OECD’s Crypto-Asset Reporting Framework (CARF) and updates to the Common Reporting Standard over the next two years. A bill is expected in the first half of this year.
According to the Budget documents, the reforms are intended “to enhance tax transparency and combat cross-border tax evasion.” By aligning Hong Kong crypto regulation with OECD reporting standards, authorities aim to maintain the city’s reputation as a compliant international financial center.
Competitive positioning in global digital finance
Taken together, the reforms represent one of the most comprehensive digital asset policy pushes in the city’s history.
Hong Kong crypto regulation now spans licensing expansion, stablecoin approvals, tokenization guidance and international tax alignment.
For policymakers, the strategy appears designed to strike a balance: enabling innovation while maintaining systemic safeguards.
For crypto investors, the clarity may reduce regulatory uncertainty and attract institutional capital seeking regulated exposure in Asia.
As global jurisdictions compete to define the rules of digital finance, Hong Kong crypto regulation is positioning the city as a structured, compliance-first hub rather than a permissive outlier.
The coming months particularly the issuance of the first stablecoin licenses and the tabling of the new bill will determine how effectively these reforms translate from policy announcements into operational market infrastructure.
If implemented as outlined, Hong Kong crypto regulation could reshape the region’s digital asset landscape and reinforce the city’s ambition to compete with leading global crypto financial centers.
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