The Hong Kong Monetary Authority (HKMA) on Monday (September 8) released a consultation paper on a new supervisory policy manual module, CRP-1, which outlines how crypto-assets should be classified under the Basel Committee on Banking Supervision’s global capital standards due to take effect in early 2026.
The proposed framework focuses on crypto-assets issued on permissionless blockchains, the public chains that underpin most mainstream stablecoins and tokenised products.
According to Andrew Fei, partner at law firm King & Wood Mallesons, “If issuers can show they have effective safeguards against risks tied to public chains, such assets could qualify for lower capital charges” under the new guidelines, he told Caixin.
The shift carries particular weight for stablecoins.
The consultation states that stablecoins licensed under Hong Kong’s new Stablecoin Ordinance, which came into force on August 1, will be treated as lower-risk assets. Banks would therefore face significantly lighter capital requirements compared with the stricter treatment set out under existing banking rules.
From January 1 2026, Hong Kong will implement the Basel Committee’s framework through amendments to its Banking (Capital) Rules, Disclosure Rules and Large Exposures Rules.
These will divide crypto-assets into two categories: Group 1, covering tokenised traditional assets (1a) and stablecoins with robust stabilisation mechanisms (1b); and Group 2, which includes unbacked tokens such as bitcoin and ether, alongside non-qualifying tokenised assets and stablecoins.
Under Basel’s approach, Group 2 assets carry very high risk weights. Those in subgroup 2b, such as highly volatile unbacked tokens, are subject to a 1,250% risk weight.
This means that for every US$100 of exposure, a bank must hold US$100 in regulatory capital, effectively a one-to-one capital charge, making such holdings prohibitively expensive.
The HKMA’s draft, however, provides a potential alternative.
It notes that tokenised assets and stablecoins issued on public blockchains may still be recognised as Group 1 if issuers adopt additional measures to mitigate four key risks identified by Basel in 2024: weak governance, cybersecurity vulnerabilities, settlement reversibility, and anti-money laundering and counter-terrorist financing compliance.
Sovereign-issued tokenised bonds and other government-backed digital assets would automatically fall under Group 1a.
In practice, this would align their capital treatment with that of the underlying asset, a significant concession for banks.
For stablecoins, the consultation goes further.
Those licensed under the HKMA regime will be classified as Group 1 assets.
Other public-chain stablecoins may also qualify, provided they are subject to comparable oversight in other jurisdictions and meet the required risk-mitigation standards.
Tokenised assets from non-sovereign issuers could also enter Group 1 if approved by a financial regulator and backed by credible risk controls recognised by the HKMA.
Fei said the guidelines “pave the way for banks to treat compliant public-chain tokenised assets and stablecoins as lower-risk holdings”.
He added that the HKMA’s approach mirrors that of other major jurisdictions and “could raise banks’ willingness to invest in digital assets”, with broader implications for Hong Kong’s role as a global crypto hub.
The timing is notable.
Hong Kong’s Stablecoin Ordinance opened licence applications for issuers from August 1 to September 30.
Anchorpoint Financial Ltd., a joint venture between Standard Chartered Bank (Hong Kong), Animoca Brands and HKT Ltd., has already announced plans to apply, while market sources say several Chinese banks are also considering applications.
By clarifying that licensed stablecoins could benefit from lighter capital treatment, the HKMA has provided banks with an incentive to support their circulation.
This, Fei noted, could increase the use of licensed stablecoins within the financial system.
Featured image credit: Edited by Fintech News Hong Kong, based on image by MMollaretti via Freepik
