- Hong Kong’s crypto regulations allow brokers to offer margin financing.
- New rules introduce perpetual contracts for professional investors in Hong Kong.
- SFC updates improve liquidity and integrate digital assets with traditional markets.
Hong Kong’s Securities and Futures Commission (SFC) has announced new policy measures that will significantly impact the city’s crypto market. The updates will allow brokers to offer crypto margin financing and licensed platforms to provide perpetual contracts for professional investors. These initiatives are part of Hong Kong’s strategy to become a leading global hub for digital assets while integrating them with traditional financial markets.
New Framework for Perpetual Contracts
Under the new framework, virtual asset trading platforms licensed by the SFC will be able to offer perpetual contracts. However, these products will only be available to professional investors. To ensure risk mitigation, platforms will need to implement strict measures, including leverage limits, margin requirements, and robust liquidation mechanisms. Platforms will also be expected to provide enhanced disclosures to ensure investors are well-informed of potential risks. Additionally, the products will be subject to ongoing regulatory supervision, with platforms needing to demonstrate sound internal controls.
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In a further update, the SFC issued new guidelines that allow licensed intermediaries to accept a wider range of collateral for crypto asset trading. Bitcoin and ether are now specifically referenced as acceptable collateral, provided there are thorough client suitability assessments and risk controls in place.
The new regulations also aim to address liquidity fragmentation in Hong Kong’s crypto markets. Tim Sun, senior researcher at HashKey Group, emphasized that these measures will help improve market efficiency and price quality by allowing licensed exchanges to access global market depth. This, according to Sun, will provide a foundation for the next phase of development for the region’s crypto sector.
Strengthening Liquidity and Integration
Eric Yip, Executive Director of Intermediaries at the SFC, highlighted that the regulator’s current priorities are focused on market liquidity rather than rapid market expansion. At the Consensus Hong Kong event, Yip explained that the SFC aims to strengthen price discovery and investor confidence through a strategic combination of expanded access and responsible product innovation.
Market participants view these changes as a positive step toward integrating traditional securities and digital assets. Sherry Zhu, Global Head of Digital Assets at Futu Group, remarked that the introduction of cross-collateralization between virtual assets and traditional securities and the allowance for perpetual contracts reflects Hong Kong’s commitment to innovating the regulatory framework for virtual assets.
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