Hong Kong's Securities and Futures Commission (SFC) announced Monday it will permit licensed cryptocurrency trading platforms to connect with global order books, marking a significant liberalization of the city's digital asset regulations.
The policy shift, revealed by SFC chief executive officer Julia Leung during a fireside chat at Hong Kong Fintech Week, breaks from the current closed-loop model that restricts platforms to Hong Kong-based orders only. The regulator published two circulars detailing the new framework, which aligns cryptocurrency trading more closely with traditional asset regulations.
"Making steady strides in market liquidity and business offerings is crucial to sustaining the growth momentum of Hong Kong's digital asset ecosystem," Leung said in a statement posted on the SFC website. "Today, we take a significant step to connect with global liquidity, underscoring our commitment to striking a right balance in fostering market innovation and vitality while upholding high standards for investor protection and market integrity."
Under the new guidance, SFC-licensed virtual asset trading platform operators can combine their order flows with affiliated overseas platforms through shared order books. The move represents the first implementation step under Pillar A of the SFC's ASPIRe roadmap, designed to attract global platforms, order flows, and liquidity providers.
Hong Kong investors are expected to benefit from enhanced market liquidity and more competitive pricing through seamless cross-platform order matching, according to the regulator.
The SFC also outlined plans to allow licensed brokers to route client orders to regulated overseas liquidity pools within the same corporate group, though no timeline was provided for this next phase.
In a separate circular, the regulator expanded product offerings, permitting platforms to list virtual assets without the previously required 12-month track record for professional investors. Platforms can now also offer Hong Kong Monetary Authority-licensed stablecoins, distribute tokenized securities, and provide digital asset-related investment products.
Leung acknowledged that Hong Kong's cryptocurrency activity has lagged behind major hubs like the United States, attributing the gap to the city's stringent regulatory approach. She indicated regulators would continue easing restrictions as investor protection measures are solidified.
The policy changes could attract major international exchanges to establish Hong Kong operations using broker licenses, potentially bypassing the years-long process required to obtain full cryptocurrency exchange licenses.
The announcements came on the opening day of Hong Kong Fintech Week, taking place November 3-4 at the Hong Kong Convention & Exhibition Centre.
