Hong Kong’s Securities and Futures Commission (SFC) announced a significant expansion in regulated cryptocurrency trading services, unveiling new guidelines that allow licensed brokers to offer crypto margin financing and establish a framework for perpetual contracts on licensed platforms — moves designed to enhance market liquidity and integrate digital assets more deeply into the city’s financial ecosystem.
The announcements were made at Consensus Hong Kong 2026, a major crypto and blockchain event hosted at the Hong Kong Convention and Exhibition Centre, where top financial regulators and industry leaders converged to discuss developments shaping the future of digital markets.
Crypto Margin Financing Moves Forward
Under the SFC’s updated guidance, licensed intermediaries and brokers can now offer margin financing for virtual asset trading, bringing structured leverage to regulated crypto markets. Brokers will be permitted to extend credit to clients with strong credit profiles and adequate collateral, which may include Bitcoin (BTC) and Ethereum (ETH) — the first cryptocurrencies approved for this purpose under the new regime.
The initiative builds on traditional securities margin financing standards, requiring firms to enforce client suitability assessments, prudent collateral haircuts, internal risk controls and robust governance protocols before extending such financing.
Framework for Perpetual Contracts
In addition to margin lending, the SFC has outlined a high‐level framework enabling licensed virtual asset trading platforms (VATPs) to offer perpetual contracts — leveraged derivative products with no expiry date — to professional investors only.
Platforms wishing to launch perpetual contracts will be required to implement strict risk management measures, including leverage limits, margin requirements, orderly liquidation systems and enhanced disclosure obligations for investors.
This marks the first time Hong Kong has provided formal guidelines for regulated perpetual crypto derivatives, which until now have been largely accessed through offshore exchanges not subject to local oversight.
Broadening Liquidity and Market Quality
Regulators emphasized that the measures are intended to strengthen liquidity, deepen price discovery and improve market quality, while maintaining investor protection and financial stability. SFC Executive Director of Intermediaries, Eric Yip, noted that the city’s digital asset strategy — outlined in its Access, Safeguards, Products, Infrastructure and Relationships (ASPIRe) roadmap — is now entering a “defining stage” of development.
The regime also includes guardrails for affiliated entities to act as market makers on licensed platforms, subject to conflict-of-interest safeguards, functional independence and surveillance controls — all aimed at supporting orderly liquidity without compromising fairness.
Professional-Only Access With Safeguards
While the new rules broaden the scope of regulated crypto products, access to perpetual contracts is limited to professional investors — institutions and sophisticated traders — rather than retail clients. The margin financing rules also include careful risk controls to limit leverage exposure among eligible traders.
Industry observers see the move as a measured expansion that balances innovation with prudence, enabling regulated access to more complex crypto trading tools while avoiding systemic risks inherent in highly leveraged products.
Context: Hong Kong’s Crypto Regulatory Evolution
Hong Kong’s latest measures follow a series of regulatory initiatives aimed at positioning the city as a leading crypto and digital asset hub in Asia. This includes licensing regimes for virtual asset trading platforms and custodians, and plans to issue the city’s first stablecoin licenses in early 2026.
By incorporating structured leverage and perpetual products into its regulated framework, the SFC aims to bridge traditional finance and digital markets in a way that prioritizes transparency, risk governance and market quality.
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