Hong Kong Imposes 100% Risk Weight on Insurers’ Crypto Holdings
Hong Kong's Insurance Authority is tightening capital requirements for cryptocurrency exposures, mandating a 100% risk weight on insurers' crypto assets. The move, outlined in a December 4 draft framework, aims to reshape balance sheet strategies as the territory positions itself as a crypto hub ahead of 2026.
Stablecoins receive differentiated treatment—those regulated in Hong Kong will inherit the risk weighting of their underlying fiat currencies. This bifurcated approach reflects regulators' attempt to balance innovation with financial stability concerns.
The policy emerges as Hong Kong accelerates its crypto infrastructure development, with observers noting the rules could divert institutional capital toward state-backed blockchain initiatives.