Hong Kong Proposes Reduced Capital Requirements for Banks Holding Crypto Assets
Hong Kong's financial regulator is moving to ease capital requirements for banks holding certain cryptocurrency assets, a strategic play to position the territory as a more attractive hub for institutional crypto activity. The Hong Kong Monetary Authority's draft guidance, set to take effect in 2026, introduces a nuanced approach to classifying digital assets under Basel III standards.
Permissionless blockchain-based assets may qualify for reduced capital buffers if issuers demonstrate robust risk management frameworks. This marks a notable departure from traditional 100%+ capital requirements for high-risk exposures. The proposal reflects Hong Kong's deliberate calibration of financial regulation to foster crypto innovation while maintaining systemic stability.
