Hong Kong Unleashes Crypto Revolution: Capital Requirements Set for Major Relaxation

Hong Kong shakes up crypto regulations with sweeping capital requirement reforms—positioning itself as Asia's digital asset hub.

The Regulatory Shift

Financial authorities slash capital barriers for crypto firms, ditching outdated frameworks that stifled innovation. The move signals Hong Kong's aggressive pivot toward becoming a blockchain powerhouse.

Market Impact

Expect waves across exchanges and trading platforms—lower entry costs mean more players jump into the game. Traditional finance giants might finally stop pretending they don't see the blockchain revolution happening.

Global Implications

While other regulators drag their feet, Hong Kong steals the spotlight with pragmatic policies. Because nothing motivates change like watching your competition eat your lunch—especially when that lunch is a multi-trillion dollar market.

The Hong Kong Monetary Authority (HKMA) is set to relax capital requirements for banks holding cryptocurrencies. According to local reports, the HKMA recently circulated a new draft to banks, detailing how global Basel standards will be integrated into domestic regulations. This regulatory change is anticipated to take effect at the start of 2026.

Details of the Regulatory Draft

The HKMA’s new policy module, titled “CRP-1,” is grounded in the international capital rules of the Basel Committee on Banking Supervision. The draft particularly focuses on the classification of cryptocurrencies operating on unauthorized Blockchains. It suggests that these assets can be assessed with lower capital obligations under certain conditions. Provided the issuers implement risk management and oversight measures, banks may allocate a reduced capital percentage to these cryptocurrencies.

Hong Kong Para Otoritesi

The HKMA’s initiative began with a consultation paper sent to the banking sector. This approach allows for collecting feedback from local financial institutions to finalize the regulation. The goal is to align with international standards while adapting Hong Kong’s financial regulations to accommodate the use of cryptocurrencies. As a result, the new regulation paves the way for banks to enter the cryptocurrency domain under more flexible conditions.

Expanding Crypto Regulations in Hong Kong

Recently, Hong Kong has significantly enhanced its legal framework for the cryptocurrency sector. A licensing system for exchanges is in place, and a regulatory framework for issuing stablecoins has been formulated. In August, the Securities and Futures Commission (SFC) mandated licensed platforms to strengthen the standards for custody of customer assets.

While cryptocurrency trading and mining remain prohibited in mainland China, regulatory authorities in Hong Kong are shaping the sector in a different direction.