Hong Kong Virtual Asset Regulation: Three Arrow Measures Announced! Margin, Perpetual Contracts, and Market Makers to be Opened

Hong Kong Securities and Futures Commission CEO Julia Leung announced three new initiatives to establish a comprehensive virtual asset regulatory ecosystem. Regarding secured financing, licensed brokers will be permitted to provide financing to creditworthy clients, with collateral including securities and virtual assets. For perpetual contracts, a high-level regulatory framework will be announced to allow licensed platforms to offer perpetual contract products. Concerning related market makers, regulations are expected to be relaxed to permit licensed platforms to provide liquidity through affiliated market-making units.

Three New Policies Mark a New Chapter for Hong Kong’s Crypto Finance

Julia Leung, CEO of the Hong Kong Securities and Futures Commission, stated at Consensus 2026 that the agency is committed to building a complete virtual asset regulatory ecosystem and announced three new measures. The simultaneous rollout of these policies signifies that Hong Kong’s virtual asset regulation is moving from “cautious pilot” to a “full open” phase.

The first is secured financing. It allows brokers to provide financing services to creditworthy clients, with collateral including securities and virtual assets. Initially, only Bitcoin and Ethereum will be available, with prudent haircut standards referencing traditional finance. Haircut is a core risk management tool that determines what proportion of collateral value can be borrowed against. For example, a 50% haircut means a $1 million Bitcoin can only be borrowed for $500,000.

The opening of secured financing will significantly boost leverage and liquidity in Hong Kong’s virtual asset market. Investors will no longer need to sell Bitcoin to access liquidity; they can use Bitcoin as collateral to borrow funds for other investments or spending. This “holding and earning” model is common in mature financial markets (such as stock pledges), and extending it to crypto assets is a major breakthrough.

The second is perpetual contracts. A high-level regulatory framework will be announced to permit licensed platforms to offer perpetual contract products. Currently, such services are limited to “professional investors” and require platforms to maintain high transparency and risk management for volatility fees and auto-liquidation. Perpetual contracts are among the most popular crypto derivatives, with daily global trading volumes in the hundreds of billions of dollars. Previously, Hong Kong’s licensing regime completely banned licensed platforms from offering perpetual contracts, forcing users to turn to overseas platforms. Although now limited to professional investors, this is a significant step forward.

Hong Kong Virtual Asset Regulation: Three New Policies

Secured Financing: Bitcoin/Ethereum collateralized loans to enhance leverage and liquidity

Perpetual Contracts: Available via licensed platforms, only for professional investors, requiring high transparency

Related Market Makers: Subsidiaries can provide liquidity, with independence and conflict-of-interest management

The third is related market makers. Regulations are expected to be relaxed to allow licensed platforms to provide liquidity through their affiliated market-making units, provided they can demonstrate operational independence and strict conflict-of-interest management. This policy addresses longstanding liquidity issues faced by Hong Kong crypto exchanges. Previously, exchanges could not use their related entities for market making and had to rely on external market makers, but few were willing to serve Hong Kong’s relatively small market. Now, allowing related market making enables exchanges to “back and forth” provide liquidity internally, greatly improving trading depth.

HSBC and Standard Chartered to Obtain First Stablecoin Licenses by End of March

According to Techub News, multiple sources have revealed that Hong Kong’s first compliant stablecoin licenses are expected to be issued by the end of March 2026, with HSBC and Standard Chartered anticipated to be the first recipients. It is said that after the initial licenses are granted, a second round of approvals will proceed swiftly, with announcements expected soon.

HSBC and Standard Chartered’s roles as the first stablecoin issuers are highly symbolic. They are Hong Kong’s two largest banks and globally systemically important banks. Issuing stablecoins at this level of credibility and compliance far surpasses crypto-native companies like Tether and Circle. This “bank-grade stablecoin” could redefine the stablecoin market, attracting institutions and individuals who are hesitant to use USDT or USDC due to trust issues.

Leung noted that tokenized assets have grown rapidly over the past year, with tokenized gold assets reaching $400 million in assets under management, doubling in the last six months. Currently, the SFC has authorized 11 tokenized money market funds. Additionally, Project Ensemble is piloting tokenized deposit settlement money market funds. These developments demonstrate Hong Kong’s rapid progress in the RWA tokenization space.

John Lee Declares Hong Kong as a Global Digital Asset Hub

Hong Kong SAR Chief Executive John Lee delivered a brief speech at the opening of Consensus Hong Kong, outlining Hong Kong’s efforts in developing the crypto community and enterprises. In a pre-recorded message, he stated: “The Hong Kong SAR government is committed to transforming Hong Kong into a global hub for digital asset innovation. Over the past few years, Hong Kong has actively built a regulatory framework to promote the healthy and sustainable development of the Web3 ecosystem.”

John Lee emphasized that Hong Kong can leverage the growing crypto sector’s advantages while benefiting from its close ties with Mainland China and broader financial markets. He mentioned Hong Kong’s efforts, including last year’s digital asset regulatory policy statement and work related to stablecoins. He highlighted that “Hong Kong is well-positioned to advance Web3 development, and we will continue to do our best to stay at the forefront of this financial and technological transformation. We welcome global enterprises and institutions to join us in building a brighter digital future.”

For global crypto companies, Hong Kong is becoming the third major “crypto-friendly” hub after Singapore and Dubai. Compared to Singapore’s high compliance costs and strict vetting, Hong Kong offers greater openness and more license types. Compared to Dubai’s full liberalization, Hong Kong’s regulatory framework is more mature, with better financial infrastructure. This “open but controlled, innovative yet grounded” balance could position Hong Kong as a key player in the global crypto landscape.