Hong Kong is expected to allow crypto derivative trading for professional investors, expanding the fintech ecosystem and aiming for a global digital asset center position.
Hong Kong's securities regulator plans to permit crypto derivative product trading exclusively for professional investors, aimed at expanding the fintech ecosystem and consolidating the special administrative region's position on the global digital asset map.
Information was confirmed by Hong Kong's Financial Services and Treasury Secretary, Christopher Hui Ching-yu on June 4, according to a report by China Daily HK.
The Hong Kong Securities and Futures Commission emphasized that it will implement strict risk management measures to ensure transparent, safe, and orderly trading. This decision comes as the global digital asset market value has exceeded $3 trillion, with annual trading volume reaching over $70 trillion.
Allowing crypto derivative trading is the latest step in Hong Kong's financial product diversification strategy. Previously, in early 2024, the SFC approved several staking services, spot digital asset ETFs, and futures contracts ETFs. The HashKey platform also received a staking service license in April 2024.
Hong Kong is actively optimizing its tax framework to attract international investors, expected to apply tax incentives for digital assets similar to investment funds, single family offices, and contribution-based benefits.
Invest Hong Kong and Hong Kong Key Enterprises Office are implementing one-stop support services for businesses, including licensing support, tax incentives, and legal compliance. These efforts have yielded positive results, with over 1,100 fintech companies operating in the special administrative region, including 8 licensed digital banks, 4 virtual insurance companies, and 10 digital asset trading platforms under management.
Since issuing its first Digital Asset Policy Statement in October 2022, Hong Kong has pioneered the launch of the first digital asset futures ETF in Asia, followed by spot ETFs in April 2024 and inverse ETFs in July 2024.
In September 2024, two of Hong Kong's top financial regulators announced the application of European Securities and Markets Authority (ESMA) reporting requirements for over-the-counter crypto derivative products.
Hong Kong is currently preparing to release its second Digital Asset Policy Statement this year, targeting Web3 technology integration into traditional financial systems. Simultaneously, in May, the Hong Kong Legislative Council passed the Stablecoin Bill, establishing a clear legal framework for stablecoins, further strengthening the special administrative region's digital asset center and Web3 development position.
