Hong Kong Moves Closer to Stronger Crypto Regulations
Hong Kong’s insurance regulator is planning to introduce new capital rules that could significantly impact how insurers invest in cryptocurrencies and digital assets, according to a report by Bloomberg.
The proposed framework aims to strengthen financial stability while guiding insurance funds toward regulated crypto investments and government-backed infrastructure projects.
100% Risk Charge Proposed for Crypto Asset Investments
Under the draft proposal, the Hong Kong Insurance Authority (IA) plans to apply a 100% risk charge on insurers’ exposure to crypto assets. This means insurers would be required to hold full capital coverage for any crypto-related investments, reflecting the high volatility and risk associated with digital currencies.
This move is designed to protect policyholders while allowing cautious participation in the growing digital asset market.
Stablecoins to Receive Special Regulatory Treatment
The proposal also outlines a more flexible approach for stablecoins. If a stablecoin is regulated within Hong Kong, its risk charge would be assessed based on the underlying fiat currency, such as the US dollar or Hong Kong dollar.
This distinction highlights the regulator’s intention to support regulated stablecoin adoption while maintaining strict oversight.
Public Consultation Expected in Early 2026
According to the draft document dated December 4, the Insurance Authority plans to launch a public consultation between February and April 2026. Following industry feedback, the rules will be submitted for legislative review.
The regulator confirmed it has been reviewing its risk-based capital framework since earlier this year to align with global regulatory developments in crypto and stablecoins.
Hong Kong Strengthens Its Position as a Global Crypto Hub
These proposed rules come as Hong Kong accelerates its push to become a leading global crypto hub. Authorities have already introduced licensing frameworks for virtual asset trading platforms and stablecoin issuers.
In November, the Securities and Futures Commission (SFC) released new guidelines to boost liquidity, expand product offerings, and allow crypto exchanges to access global order books, further enhancing market competitiveness.
Regulator Seeks Industry Feedback
A spokesperson for the Insurance Authority stated that the review considers the latest regulatory trends related to digital assets, adding that the regulator is currently collecting industry input before finalizing the proposal.
The spokesperson confirmed that the consultation process will move forward in due course.
