Hong Kong pushed its digital asset rulebook into a new phase on June 27, when the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) launched a joint public consultation on licensing regimes for digital asset dealing and custodian service providers. The move caps a multi‑year push that already brought in licenses for exchanges and fiat‑referenced stablecoin issuers, and it sets up a broader framework that traders expect to start biting from 2026. Bitcoin traded near $87,466 on the day, up about 0.4% over 24 hours, while Ether hovered around $2,923 with little movement, a sign this is structure news rather than a directional catalyst.
From VATP regime to stacked licenses
The new consultation sits on top of an existing licensing layer for virtual asset trading platforms. Hong Kong amended its Anti‑Money Laundering and Counter‑Terrorist Financing Ordinance in 2022, then brought a licensing regime for virtual asset service providers into force in June 2023. The government flagged that regime to the Financial Action Task Force as its core response on exchange supervision and investor protection in a 2023 follow‑up report.
Regulators then turned to the grey zones around exchanges. In February 2024, the FSTB opened a consultation on a licensing regime for over‑the‑counter virtual asset dealers, warning that several fraud cases had run through unregulated OTC shops. That paper proposed that anyone offering spot virtual asset trading for money in Hong Kong must register with Customs as a licensee, whether they operate through a physical counter or an online channel.
Stablecoins followed. The government gazetted a Stablecoins Bill in December 2024, then the Legislative Council passed it in May 2025, creating a dedicated licensing regime for issuers of fiat‑referenced stablecoins. Officials later set August 1, 2025 as the commencement date of the Stablecoins Ordinance, with the Hong Kong Monetary Authority (HKMA) in charge of licensing and supervision. Under that framework, any issuer that offers a Hong Kong dollar‑referenced stablecoin or markets to the Hong Kong public needs an HKMA license, must segregate client assets, maintain sufficient reserve assets and honour redemptions at par.
By late July 2025, the HKMA had already laid out transitional guidance and reminded issuers that no licenses had been granted yet, warning against premature claims of regulatory status in a detailed circular on the implementation of the stablecoin regime. The message landed clearly. Anyone who wants to issue a major Hong Kong‑linked stablecoin will have to meet bank‑style standards.
Dealers and custodians step into the spotlight
The June 27 consultation now targets the two remaining pillars of institutional infrastructure. Under the FSTB and SFC proposal, any firm that runs a digital asset dealing business in Hong Kong must obtain a license or registration with the SFC, regardless of whether it operates through a branch office, an app or an execution desk. That scope runs from simple conversions between tokens and fiat to brokerage, block trades and advisory or asset management activity tied to digital assets.
On the custody side, any business that safeguards client digital assets or controls the instruments that move those assets, including private keys, will fall into a dedicated licensing bucket. Licensed dealers and custodians will face fit‑and‑proper tests and hard requirements on financial resources, risk management, reporting, conduct and client asset protection. Regulators also propose to avoid any grandfathering. They plan to switch the regimes on in full once the statutory provisions commence.
The SFC will set standards for both regimes. The HKMA will act as frontline supervisor for banks and stored‑value facility issuers that offer dealing or custody, splitting roles but keeping a single rulebook. The consultation window runs until August 29, 2025, after which the government will move toward a bill and detailed subsidiary rules.
The Secretary for Financial Services and the Treasury, Christopher Hui, said the consultation sends a message that Hong Kong wants to build a global digital asset hub without relaxing its focus on investor protection.
What this means for venues and capital
Taken together, Hong Kong is building a layered framework that covers exchanges, OTC desks, custodians and stablecoin issuers through specific licenses under different regulators. Virtual asset trading platforms already sit under the SFC regime. OTC providers are set to report to Customs once the 2024 proposals convert into law. Stablecoin issuers line up under the HKMA. Dealers and custodians now join the queue through the June 2025 consultation.
For exchanges and service providers that already target Hong Kong clients, the message is binary. Either run a clean, supervised business with capital, compliance and local substance, or exit the market. The SFC has already warned virtual asset platforms about misleading claims around licensing status, and officials now extend that stance to stablecoin issuers and future dealing and custody shops.
For traders, the near‑term price response stayed muted. The longer‑term impact sits elsewhere. A fully licensed stack creates a path for more traditional institutions to handle spot crypto and tokenised products inside existing Hong Kong legal rails. That path relies on this consultation converting into a bill and passing through the Legislative Council, a process that realistically pushes any new dealer and custodian licenses into 2026.
Markets will watch three milestones from here. First, how the industry responds to the FSTB and SFC consultation papers and whether the final bill softens any of the proposed requirements. Second, how quickly the HKMA moves from stablecoin guidance to actual licenses. Third, how many of today’s offshore platforms decide that a fully regulated Hong Kong presence is worth the cost once the new rules lock in.
