Hong Kong Plans 100% Risk Charge for Insurers Holding Crypto Assets

TLDR

Table of Contents

Hong Kong Insurance Authority proposes 100% risk charge on crypto asset holdings.
Stablecoins regulated in Hong Kong would follow fiat-based risk assessments.
Public consultation for the draft rules is expected from February to April.
The rules aim to guide insurer capital while supporting economic development.

Hong Kong’s insurance regulator is considering changes that could reshape how insurers treat crypto assets on their balance sheets. A draft proposal shows plans to adjust capital requirements for insurers with exposure to digital assets. The framework would introduce stricter risk charges for crypto holdings. Regulators say the review aims to support market stability and long-term economic development. The proposal is still under review and has not been finalized.

Insurance Authority Reviews Risk-Based Capital Rules

The Hong Kong Insurance Authority has begun a review of its risk-based capital framework.
The review focuses on how insurers allocate capital across different asset classes.
According to a proposal seen by Bloomberg, crypto assets would receive special treatment.
The regulator is assessing whether current rules reflect the risks tied to digital assets.

Under the draft framework, insurers’ exposure to crypto assets would face a 100% risk charge. This approach would require insurers to fully cover crypto exposure with capital reserves. Such treatment places crypto assets among the highest-risk investments for insurers. The proposal would apply to both direct holdings and indirect exposure.

According to Bloomberg, the Hong Kong Insurance Authority is proposing a set of new rules to channel insurance capital into assets including cryptocurrencies and infrastructure. Under a presentation document, the regulator would apply a 100% risk capital charge to crypto assets,…
— Wu Blockchain (@WuBlockchain) December 22, 2025

In a statement to Bloomberg, the Insurance Authority said the review began earlier this year. It added that the goal is to support the insurance sector while contributing to economic growth. The regulator noted that the proposal remains subject to change. Final decisions will depend on further analysis and consultation feedback.

Stablecoins Assigned Different Capital Treatment

The draft rules draw a clear distinction between crypto assets and stablecoins. Stablecoin investments would not automatically face a 100% risk charge. Instead, their risk level would reflect the underlying fiat currency. This treatment would apply only to stablecoins regulated within Hong Kong.

The framework links stablecoin risk to existing currency standards. This approach aligns with Hong Kong’s ongoing work on stablecoin regulation. Authorities have already signaled plans to supervise stablecoin issuers. Only compliant stablecoins would qualify for adjusted capital treatment.

Insurers would still be required to assess operational and counterparty risks. The regulator has not yet defined which stablecoins would be eligible. Further details are expected during the public consultation phase. Market participants are likely to seek clarity on compliance requirements.

Consultation Timeline and Legislative Review

The Insurance Authority plans to release the proposal for public consultation. The consultation period is expected to run from February through April.During this time, insurers and industry groups can submit comments. Feedback may influence revisions to the draft rules.

After the consultation, the regulator plans to submit the measures for legislative review. This step would move the proposal closer to formal adoption. No timeline has been set for implementation. The schedule may depend on legislative approval and industry readiness.

Bloomberg reported that the document remains a draft. The Insurance Authority has not yet published the proposal. The Block has reached out to the regulator for further details. No additional comments were available at the time of reporting.

Proposal Aligns With Hong Kong Crypto Policy Push

The move comes as Hong Kong expands its digital asset regulatory framework. Authorities have introduced licensing systems for virtual asset trading platforms. Stablecoin issuers are also being brought under regulatory oversight. These efforts aim to build a controlled and transparent crypto market.

In November, the Securities and Futures Commission released new guidance. The circulars focused on improving liquidity and expanding exchange products. Local platforms were allowed to access global liquidity through shared order books. The changes were designed to strengthen Hong Kong’s crypto market structure.

The insurance proposal fits within this broader regulatory direction. It reflects caution toward crypto risk while allowing limited exposure. Officials continue balancing innovation with financial stability. More details are expected as the consultation period approaches.