The recent upgrade of HashKey and OSL’s licenses marks a pivotal moment in Hong Kong’s journey toward becoming a regulated Web3 hub. With both platforms now officially authorized to serve retail investors and offer compliant over-the-counter (OTC) services, the city has taken a bold step in aligning its financial infrastructure with the digital asset economy. This development raises critical questions about the future of cryptocurrency regulation, market access, and financial innovation in Hong Kong.
In this article, we explore five major outlooks shaping Hong Kong’s crypto policy landscape over the next year — from eligible tokens for retail trading to the potential rollout of real-world asset (RWA) tokenization and stablecoin regulation.
1. Which Cryptocurrencies Could Be Eligible for Retail Trading?
Under new guidelines issued by the Securities and Futures Commission (SFC) in March 2025, only “qualified large virtual assets” can be offered to retail investors. To qualify, a cryptocurrency must be included in at least two recognized indices published by independent providers — with at least one provider having experience in traditional financial market indices, such as those tracked by SFC-approved index funds.
According to data analysis by @tier10k, Bitcoin (BTC) and Ethereum (ETH) are currently listed across all five major institutional indices, making them strong candidates for retail availability. Litecoin (LTC) and Polkadot (DOT) appear in four, while Bitcoin Cash (BCH) and Solana (SOL) are featured in three. Additional assets like Cardano (ADA), Avalanche (AVAX), Polygon (MATIC), and Chainlink (LINK) meet the minimum threshold of two index inclusions.
👉 Discover which crypto assets are most likely to gain regulatory approval for public trading.
Currently, 13 digital assets satisfy the index inclusion criteria:
BTC, ETH, ADA, SOL, MATIC, DOT, LTC, AVAX, UNI, LINK, AAVE, BCH, and CRV.
However, inclusion in indices is just one requirement. Platforms must also conduct thorough due diligence and obtain written approval from the SFC before listing any token for retail trading. Given concerns about network performance and market stability, SOL and BCH may face additional scrutiny despite meeting technical thresholds.
As of now, HashKey offers trading for only five assets — BTC, ETH, USDT, USDC, and USD — while OSL supports BTC and ETH. This cautious rollout reflects the balance between innovation and investor protection under Hong Kong’s evolving regulatory framework.
2. Can Brokers and Banks Enable Mass Crypto Access?
A significant milestone occurred on June 26 when HSBC, Hong Kong’s largest bank, began allowing clients to trade virtual asset ETFs listed on the Hong Kong Stock Exchange. This makes HSBC the first local bank to offer such access, signaling growing institutional acceptance of digital assets.
Currently available ETFs include:
- CSOP Bitcoin Futures ETF
- CSOP Ethereum Futures ETF
- Samsung Bitcoin Active Futures ETF
This integration allows traditional investors to gain exposure to crypto markets through familiar brokerage accounts — without directly holding digital assets.
BC Technology Group’s CFO, Hu Zhenbang, emphasized that financial institutions must partner with licensed digital asset platforms to provide crypto-related services. There are two primary models:
- Referring clients directly to regulated exchanges.
- Integrating digital asset trading into existing platforms via partnerships with licensed VASPs (Virtual Asset Service Providers).
While banks could theoretically build their own trading systems and apply for licenses, collaboration is more efficient given the specialized nature of crypto custody, security, and compliance.
👉 Learn how traditional finance is integrating crypto through compliant pathways.
This trend suggests a future where buying Bitcoin could be as simple as purchasing stocks — all within a single, regulated financial ecosystem.
3. What’s Next for VASP Licensing in Hong Kong?
On June 1, Hong Kong transitioned from the previous dual-license system (Type 1 and Type 7) to a full VASP licensing regime, mandating registration for all crypto service providers serving retail clients.
Key requirements include:
- Establishing a physical presence in Hong Kong
- Employing at least two Responsible Officers (ROs) with combined experience in traditional finance and crypto operations
- Holding TCSP (Trust and Corporate Service Provider) and existing Type 1 & 7 licenses
- Demonstrating active user base and trading volume prior to June 1
- Operating for at least one year under regulatory observation before full licensing
Only HashKey and OSL currently hold upgraded licenses permitting retail access. However, over ten firms have announced VASP applications, including OKX, Bybit, BitMEX, Huobi, Gate.io, and traditional players like E-Bull Financial.
Despite the interest, industry experts predict only four to five platforms will ultimately receive full approval due to high compliance, capital, and operational barriers.
“Regulation isn’t just about permission — it’s about capability,” said Hu Zhenbang. “You need robust custody solutions, cybersecurity infrastructure, and back-end systems comparable to traditional financial institutions.”
This selective approach ensures quality over quantity — positioning Hong Kong as a trusted gateway for Asia’s crypto adoption.
4. Will Hong Kong Open the Door to RWA Tokenization?
In early July 2025, Elizabeth Wong, Head of Fintech at the SFC, revealed plans to revise its 2019 stance on Security Token Offerings (STOs). Under the proposed update, real-world assets (RWAs) — such as real estate, bonds, or private equity — tokenized on blockchain may no longer be classified as complex financial products.
This shift could allow retail investors to participate in tokenized asset markets, with regulation focused on the underlying asset rather than the token form.
Analysts believe this move could spark a new wave of innovation in asset tokenization — turning illiquid assets into tradable digital securities with greater transparency and efficiency.
Hong Kong’s strategic position as a global financial center makes it an ideal testing ground for RWA frameworks that balance innovation with investor safeguards.
5. When Will Stablecoin Regulation Arrive?
Stablecoin regulation has been a long-anticipated component of Hong Kong’s crypto roadmap. Since October 2022, when Chief Executive John Lee first mentioned it in his policy address, progress has steadily advanced.
Key milestones:
- January 2023: HKMA published consultation conclusions proposing oversight of stablecoin-related activities
- March 2025: Financial Secretary Christopher Hui confirmed work on a regulatory framework targeting fiat-backed stablecoins
- April 2025: HKMA’s annual report prioritized regulation of stablecoins pegged to fiat currencies
- May 2025: HKMA Chief Executive Eddie Yip stated mandatory licensing would launch between 2023–2025
- June 2025: Deputy Secretary Chan Hoi-lam confirmed public consultation was underway, with implementation expected by end of 2025
A critical debate centers on currency choice: Should Hong Kong promote USD-backed or HKD-backed stablecoins?
While some experts like HKUST Vice President Wang Yang advocate for a government-backed HKD stablecoin (HKDG) to challenge dollar dominance, others argue against state issuance. Hu Zhenbang believes privately issued USD stablecoins under SFC supervision are more viable. Meanwhile, Fang Jujin warns that “de-dollarization” is impractical under Hong Kong’s linked exchange rate system.
The consensus? A regulated, multi-currency stablecoin ecosystem is coming — but likely led by private issuers under strict oversight.
Frequently Asked Questions (FAQ)
Q: Can anyone in Hong Kong buy cryptocurrency now?
A: Yes — residents can trade BTC and ETH through licensed platforms like HashKey and OSL. Full access to other tokens depends on SFC approval.
Q: Are stablecoins legal in Hong Kong?
A: Not yet fully regulated. While USDT and USDC are available on exchanges, formal licensing for stablecoin issuers is expected by late 2025.
Q: Will banks let me deposit crypto earnings?
A: Many major banks remain cautious. However, pressure from regulators is increasing, and some institutions are beginning to accept crypto-linked transactions via partner VASPs.
Q: Is Hong Kong trying to compete with Singapore in crypto?
A: Yes — by combining strict regulation with innovation-friendly policies, Hong Kong aims to become Asia’s leading Web3 financial hub.
Q: Can I trade futures or derivatives as a retail investor?
A: Direct crypto derivatives trading is still restricted. However, retail access is available indirectly through approved Bitcoin and Ethereum futures ETFs.
Q: What happens if a licensed exchange gets hacked?
A: Licensed platforms must maintain robust cybersecurity and insurance coverage. The SFC also requires cold storage for most client assets to minimize risk.
With retail access live, institutional adoption growing, and key regulations on the horizon — Hong Kong’s crypto ecosystem is entering a new phase of maturity. The next 12 months will be decisive in determining whether the city can deliver on its promise of being a secure, innovative, and globally competitive digital finance leader.
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