Hong Kong aims to put virtual asset dealer and custodian rules before lawmakers in 2026 as it pushes to become Asia’s crypto hub, the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) said Wednesday. After a two-month public consultation that drew more than 190 responses, regulators have drafted proposals to create a licensing framework for virtual-asset dealing and custodial services. The rules would sit under Hong Kong’s Anti‑Money Laundering and Counter‑Terrorist Financing Ordinance and largely mirror existing licensing expectations for securities intermediaries — a move designed to bring digital-asset activities into the same regulatory orbit as traditional finance. Key points of the proposals - Custodian regime: Emphasis on robust controls over private keys and concrete protections for client assets. - Dealer regime: Licensing requirements and conduct standards aligned with those for securities dealers and intermediaries. - Legal framework: The rules will be introduced to the Legislative Council in 2026 if the timeline holds. These measures form part of the SFC’s broader ASPIRe roadmap, which aims to expand regulated access to virtual-asset markets. They follow a string of regulatory steps this year: in February the SFC unveiled new licensing plans for over‑the‑counter trading and announced reviews of derivatives and margin trading for virtual assets; in April the regulator approved staking services for licensed exchanges and funds — albeit with strict asset-control and risk‑disclosure requirements. Spot crypto exchange‑traded funds have also been trading in Hong Kong since 2024. Regulators are also moving to extend oversight beyond trading and custody. The SFC has launched a consultation on applying similar standards to virtual-asset advisers and managers, applying the “same business, same risks, same rules” principle so advisory and asset‑management services would face comparable requirements to their securities counterparts. Comments on that consultation are due by Jan. 23. Context and competition Hong Kong’s approach contrasts sharply with mainland China’s intensified crackdown on cryptocurrencies. The city’s measured, securities‑style regulatory playbook is intended to encourage industry development and attract exchanges, funds and other crypto firms — a bid to vie with Singapore and position Hong Kong as the region’s preferred crypto hub. Read more AI-generated news on: undefined/news