Hong Kong Prepares Licensing Expansion for Crypto Service Providers

The proposed amendment bill aims to integrate these four service areas into a unified regulatory structure, with the Securities and Futures Commission (SFC) leading the supervisory effort. For dealing and custody, regulators are modeling requirements on established securities standards, focusing specifically on safeguarding client assets and private keys. Advisory and management services will mirror existing Type 4 and Type 9 securities regulations, adhering to the principle of applying similar rules to businesses that carry comparable risks.

This legislative push follows extensive consultations conducted by the Financial Services and the Treasury Bureau and the SFC, which drew nearly 250 responses from industry stakeholders. While the bill awaits formal introduction to the Legislative Council, the government is already urging providers to initiate preliminary discussions with regulators to ensure compliance readiness. Beyond licensing, the SFC is preparing to deploy enhanced digital asset monitoring tools by 2027, while the Hong Kong Monetary Authority works toward 24/7 settlement capabilities for tokenized deposits via its EnsembleTX project. These measures, alongside existing rules for stablecoins and trading platforms, signal a continued commitment to formalizing the city's role in global virtual asset markets.