Hong Kong is positioning itself as a potential hub for cryptocurrency regulation, with local financial authorities planning to unveil a draft regulatory framework by 2026. Christopher Hui, the Secretary for Financial Services and the Treasury, announced this initiative during a recent policy briefing for the Legislative Council”s Finance Committee.
The upcoming framework will focus on regulations for providers offering crypto advisory services. Hui indicated that the Financial Services and the Treasury Bureau, along with the Securities and Futures Commission, is actively consulting the public following the issuance of a digital asset consultation paper last December.
Additionally, the Hong Kong Monetary Authority (HKMA) has commenced processing license applications for stablecoin issuers. Hui emphasized the importance of addressing how digital assets are reported for tax purposes. He stated, “We will submit legislative proposals to the Legislative Council this year to implement the revisions to the OECD”s crypto-asset reporting framework and common reporting standards.” This initiative aims to facilitate the automatic exchange of tax information concerning crypto transactions with other jurisdictions starting in 2028, aligning with global efforts to combat cross-border tax evasion.
The recently passed Stablecoin Ordinance, which took effect in August, mandates that stablecoin issuers secure licenses from the HKMA. As of now, the regulatory body has not listed any licensed stablecoin issuers, whether for those generating stablecoins within Hong Kong or those pegged to the Hong Kong dollar.
In contrast, data from the Securities and Futures Commission reveals that 11 crypto platforms are currently licensed to operate and provide services to Hong Kong residents. This regulatory landscape is crucial as public officials, including Financial Secretary Paul Chan, advocate for Hong Kong to emerge as a center for financial innovation while ensuring appropriate regulatory measures are in place.
Hui”s remarks come at a time when U.S. lawmakers are also advancing comprehensive legislation on crypto market structure, which is expected to delineate the roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission in overseeing cryptocurrencies.
