Hong Kong will issue its first licenses for fiat-referenced stablecoin issuers in March and introduce new legislation later this year covering crypto asset dealers and custodians, Financial Secretary Paul Chan said.
In his 2026-27 budget speech on Wednesday (25 February), Chan said a licensing regime for stablecoin issuers is already in place and that regulators will “continue facilitating licensed issuers in Hong Kong to explore different application scenarios in a compliant and risk-controlled manner.”
The first approvals are expected next month.
The budget also confirmed plans to table a bill this year to establish licensing regimes for digital asset dealers and custodian service providers, extending regulation beyond trading platforms and stablecoins.
In Hong Kong, digital asset dealing refers to the regulated buying, selling or exchanging of virtual assets as a business, including over-the-counter trading, according to The Block.
Liquidity remains a priority.
Chan said the Securities and Futures Commission (SFC) will take further steps to enhance market liquidity and enable a broader range of products for professional investors.
“The SFC will also set up an accelerator to expedite market innovation,”
he said.
The regulator has already indicated it will allow crypto margin financing and derivatives for professional investors.
Earlier this month, Eric Yip, Executive Director of Intermediaries at the SFC, said the agency’s priorities for 2026 focus on market quality rather than rapid expansion.
“This year’s focus is on liquidity, cultivating market depth, strengthening price discovery, and building investor confidence,”
he said.
Tokenisation is another strand of policy.
Chan said the government will issue guidance to allow market participants to maintain registers of debenture holders on blockchains and will explore using electronic signatures for tokenised bond issuance.
The Hong Kong Monetary Authority (HKMA) will continue upgrading its EnsembleTX platform for wholesale CBDC settlement.
On tax, Hong Kong will amend its Inland Revenue Ordinance over the next two years to implement the OECD Crypto Asset Reporting Framework and updated Common Reporting Standard.
Featured image credit: Edited by Fintech News Hong Kong, based on image by lifeforstock via Freepik and Hong Kong Inmedia via Wikimedia.
