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By Summer Zhen and Jiaxing Li
HONG KONG (Reuters) - Hong Kong is expanding the ways investors can trade virtual assets, its financial regulator said on Wednesday, as the city races to become Asia's digital assets hub and attract capital.
The Securities and Futures Commission will establish new licensing regimes for over-the-counter trading in virtual assets and for custody services, aiming to boost market efficiency and investor protections, it said in an statement on Wednesday.
Derivative trading and margin financing options for virtual assets are also under review, the regulator said, after its CEO Julia Leung announced the measures at CoinDesk's Consensus Hong Kong 2025 conference earlier.
Hong Kong first drew up a plan to become a virtual asset trading centre in 2022 - an effort that followed Beijing's sweeping ban on all cryptocurrency transactions in mainland China the previous year.
It has since launched the first spot crypto exchange-traded funds in Asia, and issued nine virtual asset trading platform (VATP) licences, Paul Chan, the city's financial secretary said at the conference.
Regulators are also advancing on the regulation of stablecoins and have introduced the relevant legislation to facilitate further innovation, he added.
These initiatives "reflect our commitment to building a thriving digital asset ecosystem", Chan said.
Bullish Group, which owns crypto news website CoinDesk, said it had became the 10th licensed crypto exchange in the city on Tuesday.
Consensus Hong Kong is the first major crypto industry gathering since U.S. President Donald Trump took office last month, and speakers expressed a bullish view on the regulatory environment.
"There's a big shift in sentiment in the U.S.," said Richard Teng, chief executive of Binance Holdings.
He said some sovereign wealth funds and institutional investors have gone from debating whether they should invest in crypto to considering how much they should invest.
The price of bitcoin more than doubled last year. It hit an all-time high of $109,071 on January 20 this year, the day of Trump's inauguration, but has since pulled back to stand at about $96,000.
Hong Kong's push into crypto is seen by some as offering a clue to Beijing's exploration of virtual asset regulations, at a time when the new crypto-friendly U.S. administration is drafting new regulations and exploring a national reserve to promote the industry.
"I think Hong Kong's particular role for China, not just in crypto but overall, is that it's one country, two systems," said Lawrence Chu, co-founder and CEO of digital asset firm IDA.
"We're here to play that role, to be a sandbox, maybe in some cases for China, but also to be a conduit for various activities."
(Reporting by Summer Zhen and Jiaxing Li in Hong Kong; Writing by Scott Murdoch; Editing by Edwina Gibbs, Sonali Paul and Helen Popper)
