In a progressive decision announced during Fintech Week 2025, Hong Kong’s Securities and Futures Commission (SFC) has unveiled a sweeping regulatory reform allowing licensed crypto exchanges to connect directly with global order books.
The move dismantles the city’s “ringfenced” model that previously restricted trading within its borders, enabling access to international capital and liquidity.
SFC Chief Executive Officer Julia Leung emphasized that the shift follows extensive work to ensure investor protection. “Once we are sure that we can protect investors, we do relax, as we did with global liquidity,” Leung stated.
The reform aligns Hong Kong’s digital asset framework with international financial standards, signaling the city’s ambition to reclaim its reputation as a leading fintech hub in Asia.
BTC's price trends to the downside on the daily chart. Source: BTCUSD on Tradingview
What it Means for Hong Kong’s Digital Asset Ecosystem
The SFC’s policy shift is part of a broader effort to modernize the region’s digital finance landscape. Over recent years, Hong Kong has launched a licensing regime for crypto exchanges, approved Bitcoin and Ether-linked exchange-traded products, and expanded oversight for digital asset funds.
In partnership, the Hong Kong Monetary Authority (HKMA) is preparing to issue the first stablecoin licenses by next year, while regulators are crafting new frameworks for crypto dealers and custodians.
Additionally, the SFC has removed the 12-month trading history requirement for HKMA-approved tokens and stablecoins, a change expected to accelerate listings of new digital assets.
Industry observers view these developments as pivotal for attracting institutional players. Global firms like Binance and Coinbase could soon gain entry via brokerage licenses, faster and less restrictive than full exchange approvals.
Currently, 11 exchanges and 49 brokers operate under SFC oversight, a number expected to rise sharply under the new system.
Hong Kong’s Bid to Reclaim Market Relevance
This policy overhaul highlights Hong Kong’s determination to position itself as a global crypto hub amid fierce competition from jurisdictions like Singapore and the United States.
While mainland China continues to ban crypto trading, Hong Kong has opted for a regulated innovation model balancing market access with strict compliance.
Leung acknowledged the delicate balance regulators must strike: “Overly strict requirements risk driving liquidity and talent elsewhere, but too little oversight could undermine trust.”
Hong Kong’s new policies on global liquidity and tokenization mark a shift toward deeper integration with international crypto markets.
Cover image from ChatGPT, BTCUSD chart from Tradingview
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