Hong Kong expands crypto licensing, stablecoin regime in 2026-27 budget

Hong Kong will introduce sweeping reforms to strengthen its position as a global digital asset hub, Financial Secretary Paul Chan announced in his 2026-27 Budget speech, outlining new licensing rules, stablecoin approvals and tokenization initiatives.

The government will table a bill this year establishing licensing regimes for digital asset dealing platforms and custodian service providers, expanding the city’s regulatory perimeter beyond exchanges.

The move follows Hong Kong’s second policy statement on digital assets, which aims to create what officials describe as a “comprehensive regulatory framework” for innovation and investor protection.

Chan also confirmed that Hong Kong has implemented a licensing regime for issuers of fiat-referenced stablecoins, with the first batch of licenses set to be issued next month. Authorities said they will work with approved issuers to explore compliant, risk-controlled use cases, signaling a shift from policy design to real-world deployment.

The Securities and Futures Commission (SFC) will take additional steps to deepen liquidity in the city’s digital asset market, particularly for professional investors. The regulator plans to broaden the range of products and services available and launch an accelerator program aimed at fast-tracking innovation within regulatory guardrails.

Tokenization is another key focus. The government will publish guidance clarifying that debenture holder registers can be maintained using distributed ledger technology, while exploring electronic signatures for bond issuance documents and the digitalization of bearer bonds.

In parallel, Hong Kong will amend its Inland Revenue Ordinance to implement the OECD’s Crypto-Asset Reporting Framework and updated Common Reporting Standard over the next two years. The changes, with a bill expected in the first half of this year, are designed to enhance tax transparency and combat cross-border tax evasion.

Together, the measures mark one of Hong Kong’s most comprehensive digital asset policy pushes to date, reinforcing its ambition to compete with major global crypto financial centers.