Hong Kong regulators published consultation conclusions on licensing requirements for virtual asset dealers and custodians on Wednesday.
The Financial Services and Treasury Bureau and Securities and Futures Commission simultaneously launched a one-month consultation on separate licensing regimes for advisory and management service providers.
The dual announcement expands Hong Kong's regulatory framework beyond existing requirements for trading platforms and stablecoin issuers.
Authorities received 101 submissions on proposed dealer licensing and 93 submissions on custodian licensing during consultations that closed in August.
What Happened
Hong Kong will require firms providing cryptocurrency dealing or custody services to obtain licenses once legislation takes effect.
The FSTB and SFC plan to introduce a bill to the Legislative Council in 2026.
The dealer licensing regime covers all virtual asset dealing services including over-the-counter trading and brokerage activities.
The custody framework will regulate safekeeping of private keys and client asset management.
Licensed dealers must hold client assets at licensed custodians in Hong Kong.
The new consultation on advisory and management services models itself on traditional securities regulation.
Hong Kong currently licenses seven virtual asset trading platforms including HashKey, OSL and HKVAX.
Four additional platforms received licenses in December under accelerated processing for qualified applicants.
The city's Stablecoin Ordinance licensing regime took effect in August 2025.
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Why It Matters
Hong Kong aims to position itself as a premier global virtual asset hub while tightening regulatory oversight.
SFC Chief Executive Julia Leung stated the framework ensures Hong Kong remains "at the global forefront of digital asset market developments by fostering a trusted, competitive and sustainable ecosystem."
The expanded licensing requirements address gaps in current regulations that cover only trading platforms and stablecoin issuers.
Financial Secretary Christopher Hui emphasized the legislation balances market development with investor protection.
The dealer and custodian licensing regimes link to Hong Kong's existing Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
Hong Kong positions itself as a business-friendly financial gateway between mainland China and international capital markets.
The city has tested blockchain tokenization initiatives alongside its licensing expansion.
The regulatory push comes as traditional financial institutions increase digital asset service offerings.
Majority of consultation respondents including market participants and industry associations supported the licensing expansion.
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