The global financial hub of Hong Kong has officially entered a new chapter in digital asset regulation. With the launch of its Virtual Asset Service Provider (VASP) licensing regime and the approval of the first retail-facing crypto exchanges, the city is positioning itself as a leading合规 gateway for institutional and retail participation in the crypto economy. This marks the beginning of what many are calling Hong Kong’s crypto compliance era—a pivotal moment for Asia’s digital finance landscape.
The Dawn of Hong Kong’s Crypto Regulation
In recent months, Hong Kong has taken decisive steps toward building a structured and secure virtual asset ecosystem. The Securities and Futures Commission (SFC) granted the first batch of virtual asset exchange licenses to HashKey Exchange and OSL, making them the only two platforms legally authorized to serve retail investors under the new regulatory framework.
This milestone has triggered a surge in industry activity. According to Hong Kong Legislative Council member William Li, demand for compliance talent—especially Responsible Officers (ROs) for Type 7 licenses (Automated Trading Systems)—has skyrocketed. Qualified ROs now command monthly salaries between HK$100,000 and HK$200,000, reflecting the growing value of regulatory expertise in this evolving market.
👉 Discover how global platforms are adapting to Hong Kong’s strict crypto standards.
Ripple Joins Forces with Hong Kong Regulators
International interest is mounting. Ripple, the third-largest cryptocurrency by market cap, has announced active collaboration with Hong Kong’s financial regulators and enterprises. Kirit Bhatia, Ripple’s head of commercial development, emphasized that Hong Kong is “one of the world’s most enduring financial centers” and a top hub for blockchain investment and developer talent.
Ripple is currently working on real-world asset tokenization projects using the XRP Ledger and exploring central bank digital currency (CBDC) pilots with local authorities. These initiatives align closely with Hong Kong’s vision of becoming a tokenization and Web3 innovation leader in Asia.
Eligible Tokens for Retail Trading: What Makes the Cut?
Under updated SFC guidelines issued in March 2025, only qualified large-cap virtual assets can be offered to retail investors. To qualify, a digital asset must be included in at least two “recognized indices” published by independent index providers—with at least one provider having experience in traditional financial market indices (e.g., those tracked by SFC-approved index funds).
Based on analysis by @tier10k, here's how major cryptocurrencies rank across five mainstream institutional indices:
- BTC and ETH: Included in all five indices — universal acceptance.
- LTC and DOT: Featured in four.
- BCH and SOL: Appear in three.
- ADA, AVAX, MATIC, and LINK: Listed in two.
- Others like BNB, ATOM, FIL, ETC, XLM, and UNI appear once.
While this suggests up to 13 assets—including BTC, ETH, ADA, SOL, MATIC, DOT, LTC, AVAX, UNI, LINK, AAVE, BCH, and CRV—could be eligible, final approval requires three key conditions:
- Rigorous due diligence by the exchange,
- Qualification as a large-cap asset per index inclusion,
- Explicit written approval from the SFC.
Notably, assets like SOL and BCH may face hurdles due to operational or market performance concerns.
Currently, HashKey offers only five assets (BTC, ETH, USDT, USDC, USD) across seven trading pairs. OSL supports just BTC and ETH for retail trading—highlighting cautious initial rollouts despite broader eligibility potential.
Banks Enter the Crypto Arena
A major development occurred on June 26, when HSBC, Hong Kong’s largest bank, began allowing clients to trade virtual asset ETFs listed on the Hong Kong Stock Exchange. This makes HSBC the first local bank to offer such access, significantly expanding crypto exposure for mainstream investors.
Available ETFs include:
- CSOP Bitcoin Futures ETF
- CSOP Ethereum Futures ETF
- Samsung Active Bitcoin Futures ETF
This integration signals growing institutional confidence and paves the way for broader banking sector involvement.
BC Technology Group’s CFO Hu Zhenbang noted that regulatory guidance from the SFC and HKMA requires banks and brokers to partner with licensed digital asset platforms when offering crypto services. Two cooperation models exist:
- Referral partnerships,
- Expanding service offerings through joint applications with licensed providers.
While banks can develop their own systems and apply for licenses, most will likely opt for strategic partnerships to streamline compliance and reduce operational burden.
VASP Licensing: Stricter Rules, Higher Barriers
Hong Kong officially launched its mandatory VASP licensing regime on June 1, replacing the prior voluntary “Type 1 and Type 7 license” system. The new framework allows retail access but imposes stringent requirements:
- Establishment of a physical office in Hong Kong
- At least two Responsible Officers with both traditional finance and crypto trading experience
- Minimum user base and trading volume prior to June 1
- Holding a TCSP (Trust and Corporate Service Provider) license
- Possession of Type 1 (Securities Dealing) and Type 7 (ATS) licenses
- One year of operational history under regulatory supervision before full licensing
Over ten firms have already applied for VASP licenses—including OKX, Huobi, Bybit, BitMEX, and traditional financial players like EB Financial. However, BC Tech’s Hu predicts only four to five will ultimately succeed due to high compliance costs, cybersecurity demands, custody infrastructure needs, and alignment with traditional financial standards.
👉 See how top exchanges are preparing for full compliance ahead of 2025 deadlines.
Stablecoin Regulation: On Track for 2025 Rollout
Hong Kong’s stablecoin regulatory journey began in October 2022 when Chief Executive John Lee signaled support in his first policy address. Since then:
- January 2023: HKMA released a consultation paper on crypto and stablecoin regulation.
- March 2025: Financial Secretary Paul Chan confirmed ongoing work on a stablecoin framework.
- April 2025: HKMA’s annual report specified that fiat-backed stablecoins would be prioritized.
- May 2025: HKMA confirmed mandatory licensing for stablecoin issuers by 2025.
- June 2025: Deputy Financial Secretary Christopher Hui announced public consultation is underway, with a target implementation date by end of 2025.
Notably, the SFC has stated that non-security tokens must have at least 12 months of track record, and stablecoins should not be offered to retail investors until fully regulated.
Major players—including Circle (USDC), Deloitte, Mastercard, HSBC, Ant Group (Alipay), Tencent (WeChat), Animoca Brands, and NEXO—have contributed feedback during consultation phases.
Frequently Asked Questions (FAQ)
Q: Which crypto exchanges are licensed for retail in Hong Kong?
A: As of 2025, only HashKey Exchange and OSL are authorized to serve retail customers under SFC regulations.
Q: Can any cryptocurrency be traded with retail investors?
A: No. Only qualified large-cap virtual assets included in at least two recognized indices—and approved by the SFC—can be offered to retail users.
Q: Are stablecoins legal for retail trading now?
A: Not yet. The HKMA is finalizing a regulatory framework with full implementation expected by late 2025. Until then, stablecoins are excluded from retail offerings.
Q: Why are RO salaries so high in Hong Kong?
A: Responsible Officers are critical for compliance. With few professionals meeting both financial and crypto experience requirements—and high demand from VASP applicants—salaries have surged.
Q: Will more exchanges get licensed soon?
A: While over 10 firms have applied, strict capital, operational, and compliance barriers mean only a handful (estimated 4–5) will likely succeed.
Q: How are banks involved in crypto now?
A: HSBC allows clients to trade crypto-based ETFs. Other banks are expected to follow via partnerships with licensed digital asset platforms.
👉 Stay ahead of Hong Kong’s fast-moving crypto regulations with real-time updates.
As Hong Kong solidifies its role as Asia’s premier regulated crypto hub, clarity, caution, and compliance define its path forward. With VASP licensing tightening standards and stablecoin rules nearing completion, the next 12 months will shape the future of digital finance in the region—and beyond.