Hong Kong’s financial regulators are moving forward with expanded licensing requirements for virtual asset dealers and custodians, marking a significant step in broadening the city’s digital asset regulatory framework beyond its existing stablecoin rules. The new regimes are designed to strengthen oversight, enhance investor protection and position Hong Kong as a trusted global hub for digital asset services.
New Licensing Regimes for Crypto Dealers and Custodians
Hong Kong’s Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) published the consultation conclusions on the proposed licensing frameworks for virtual asset (VA) dealing and custodian service providers on Dec. 24, 2025. The consultation attracted strong industry participation, with more than 100 submissions supporting the broad regulatory expansion.
Under the proposed regimes:
- Virtual asset dealers — including over-the-counter (OTC) trading, brokerage services, and related activities — will be required to obtain licences similar to traditional securities dealers.
- Custodian service providers — those responsible for safeguarding client crypto assets and private keys — will face dedicated licensing requirements focused on asset protection, risk controls and operational standards.
The authorities plan to introduce the legislative bill to the Legislative Council in 2026 after considering public feedback on the proposals.
Expanding Beyond Stablecoin Regulation
Hong Kong has already enacted a Stablecoin Ordinance, which took effect in August 2025 and imposes licensing requirements on stablecoin issuers through the Hong Kong Monetary Authority (HKMA).
The new dealer and custodian licensing frameworks expand regulatory coverage to include a wider range of digital asset services — filling gaps that previously existed outside trading platforms and stablecoin oversight. This approach aims to ensure comprehensive supervision of the entire virtual asset ecosystem.
Goals and Industry Impact
Regulators said the expanded framework will “build a trusted and sustainable digital asset ecosystem” by balancing market development with risk management and investor protection. Secretary for Financial Services & the Treasury Christopher Hui noted that the licensing regimes aim to enhance legal clarity and oversight across the virtual asset sector.
SFC Chief Executive Julia Leung added that the measures are intended to keep Hong Kong “at the global forefront of digital asset market developments” while fostering a competitive environment for innovation.
Scope and Regulatory Standards
The planned dealer licensing regime would require entities engaging in VA dealing activities, including both online and physical outlets, to meet strict fit-and-proper criteria and adhere to rigorous capital, risk management, reporting, and disclosure requirements similar to those applied to traditional securities dealers.
Custody licensing requirements will focus on the safekeeping of client assets, including secure management of private keys, stringent cybersecurity controls, and business continuity planning to protect users in Hong Kong’s increasingly diverse digital asset market.
Next Steps and Future Consultation
Following conclusion of the latest consultation, regulators have also launched a separate consultation on licensing for virtual asset advisory and management services. This will further align digital asset regulation with traditional financial service standards and provide greater clarity for service providers across the crypto value chain.
The consultation period for these proposals will remain open through January 2026, and the resulting feedback will help refine the legislative details before the bill’s formal introduction.
Hong Kong’s Evolving Position in Global Crypto Regulation
Hong Kong’s latest regulatory advancements come amid a global shift toward clearer digital asset frameworks, attracting institutional participation and reinforcing investor protections. By integrating dealer and custodian licensing with existing trading platform and stablecoin oversight, the city seeks to create a comprehensive and balanced regime that supports both innovation and financial stability.
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