Hong Kong Proceeds With Licensing Regimes for Virtual Asset Dealers and Custodians

• Hong Kong will introduce mandatory licensing for crypto dealers and custodians
• Consultations by the FSTB and SFC have now concluded
• New rules expand an already active crypto regulatory framework
• Stablecoin issuer licensing is already in force in 2025
• Regulators aim to position Hong Kong as a trusted global digital asset hub

Hong Kong is moving forward with new licensing regimes for virtual asset dealers and custodians, marking another step in the city’s effort to build a comprehensive regulatory framework for digital assets.

In a Wednesday announcement, the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) confirmed that consultations on the proposed regimes have been completed. Once enacted, firms offering crypto dealing or custody services in Hong Kong will be required to obtain regulatory licenses.

The move strengthens oversight across the digital asset sector and expands on Hong Kong’s existing crypto licensing structure, which already covers trading platforms and stablecoin issuers.

Crypto Licensing Framework Continues to Expand

The planned licensing requirements for dealers and custodians build on earlier regulatory milestones. In 2025, Hong Kong brought its Stablecoin Ordinance into force, creating a dedicated licensing regime for stablecoin issuers operating in the city.

Crypto trading platforms are already subject to mandatory licensing. This framework evolved from an opt-in system launched in 2020, and as of now, 11 companies have received approval from the SFC, with more applications rejected than approved. The expansion into dealer and custodian licensing closes key regulatory gaps across the crypto service stack.

Part of a Broader Digital Asset Strategy

Hong Kong has consistently positioned itself as a global crypto hub, leveraging its role as an international financial center and gateway between mainland China and global capital markets.

Beyond exchange and stablecoin regulation, the city has also advanced tokenization initiatives, signaling a long-term commitment to blockchain-based financial infrastructure. Regulators said the upcoming licensing regimes are part of a broader effort to align crypto dealers, custodians, stablecoins and tokenized assets under a single, coherent regulatory framework.

Julia Leung, CEO of the SFC, said the continued development of the city’s crypto rules would help Hong Kong maintain its competitiveness in global digital asset markets by fostering a “trusted, competitive and sustainable ecosystem.”

Advisory and Management Services Under Review

Alongside the announcement, the SFC released a separate consultation paper seeking public feedback on proposals to license crypto advisory service providers and digital asset management firms.

The proposals would bring advisory and management activities involving virtual assets under Hong Kong’s existing Anti-Money Laundering and Counter-Terrorist Financing framework. Regulators are seeking input on licensing scope, regulatory powers, sanctions and appeal mechanisms, with feedback to be considered before finalizing the rules.

Final Thought

With licensing regimes now spanning exchanges, stablecoin issuers, dealers, custodians and potentially advisors, Hong Kong is constructing one of the most comprehensive regulatory frameworks for digital assets globally. The approach signals a clear policy choice: encouraging innovation while enforcing strong compliance standards to attract institutional participation.