Hong Kong plans to fully include virtual asset trading, custody, investment advisory, and asset management businesses under licensing regulation, with a draft amendment to be submitted within the year

The Hong Kong Special Administrative Region Government's Financial Services and the Treasury Bureau stated that following the implementation of the licensing system for virtual asset trading platforms and the regulatory framework for stablecoin issuers, Hong Kong's next phase will establish a unified regulatory framework covering virtual asset trading, custody, investment advisory, and asset management services, further improving the digital asset ecosystem.

According to the disclosed plan, any institution engaged in virtual asset trading, custody, providing investment advice, or asset management business in Hong Kong must, in principle, obtain a license or registration from the Securities and Futures Commission (SFC) of Hong Kong. The regulatory scope will correspond to regulated activities under the Securities and Futures Ordinance, specifically Class 1 (securities trading), Class 4 (investment advisory), and Class 9 (asset management).

For virtual asset custody services, the regulatory focus will be on private key management and client asset security risks. The Hong Kong government stated that there are currently 13 licensed virtual asset trading platforms in Hong Kong and that 2 stablecoin issuer licenses have been issued. The future regulatory framework will be implemented according to the principle of "same business, same risk, same rules," requiring licensed institutions to meet strict standards in terms of capital strength, risk management, financial reporting, professional competence, and client asset protection.

It is noteworthy that the authorities have clearly stated that there will be no "deemed license" transitional arrangements for existing service providers; relevant institutions must proactively apply for licenses or registration qualifications. At the same time, any institution that is not licensed or registered is prohibited from actively promoting related virtual asset services to the public in Hong Kong, whether within or outside of Hong Kong.

The Hong Kong Financial Services and the Treasury Bureau revealed that relevant legislative proposals are being formulated, with the goal of submitting a revised ordinance draft to the Legislative Council by 2026. Market participants believe that if the new system is implemented, Hong Kong will become one of the few jurisdictions globally that simultaneously covers the entire regulatory chain of trading platforms, stablecoins, custody, investment advisory, and asset management, further strengthening its position as an international digital asset hub.