Hong Kong is trying to build up its crypto regulations: State of Crypto

Consensus Hong Kong wrapped up with a bang as policymakers announced new initiatives to grow the digital assets sector.

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The narrative

Policymakers at Consensus Hong Kong announced a slew of initiatives aimed at strengthening the local digital asset ecosystem.

Why it matters

Philosophically speaking, the question of why we still care about this industry remains top of mind. Consensus showed that despite the sometimes ridiculous projects and unachievable hype cycles, companies still have a genuine use for the technology.

Breaking it down

Hong Kong’s regulators are trying to encourage growth in the local digital asset ecosystem, unveiling a framework for perpetual contracts and saying that stablecoin licenses will be announced in the coming month.

“That certainty of direction gives a lot of companies confidence to invest in Hong Kong and to build further,” said Jason Atkins, the chief commercial officer of crypto trading firm Auros.

While the Special Administrative Region of China is not yet close to approving all applicants and activities, the fact that regulators like the Securities & Futures Commission and the Hong Kong Monetary Authority are willing to engage and adapt their approaches to digital assets is still significant, he told CoinDesk. They’re asking companies what they need to do to encourage investment, he said.

“We’ve gone into the SFC a few times, spoken with the HKMA on think tanks and panels and groups where they literally are just trying to understand how our businesses operate and what we need to invest even more into the city, which is really positive,” he said.

The regulators have been positively engaged, trying to discern what companies need from them to operate in the region. This includes asking whether certain regulations need to be adjusted to address market needs, he said.

“So they think about ways they can loosen those or lighten them up for certain types of investor classes,” he said.

This fits with a broader trend of more traditional institutions wanting to get into crypto — or at least blockchain.

Multiple panelists, representing companies like Franklin Templeton and Swift, said they were using or exploring blockchain technology to streamline their operations. It’s reminiscent of the 2018 “blockchain, not Bitcoin” era, but these entities are actually executing, rather than just announcing pilots.

That an increasing number of traditional entities are moving into blockchain may be the story of 2026, said Edge & Node CEO Rodrigo Coelho.

Companies are “rushing to figure this out,” he told CoinDesk. “Companies are seeking out consulting and expertise.”

Shawn Chan, of Singapore Gulf Bank, described these types of rails as being superior for transferring value.

While international regulatory hurdles need to be worked out, he estimated that companies will increasingly adopt blockchain tooling within the next decade.

This week

• Congress and federal regulators are not holding any hearings tied to crypto this week.

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