TLDR
- SFC permits licensed exchanges to connect local and global order books.
- New rules replace Hong Kong’s former ringfenced trading model.
- Policy aligns Hong Kong’s crypto framework with global standards.
- HKMA to issue first stablecoin licenses as reforms expand in 2026.
Hong Kong has opened a new chapter in its digital asset policy by allowing licensed crypto exchanges to access global capital markets. The Securities and Futures Commission (SFC) announced that platforms can now connect their local and international order books, ending the long-standing “ringfenced” model that restricted trading to Hong Kong-based investors. The move is part of a broader effort to integrate Hong Kong’s crypto sector with global markets and boost liquidity.
SFC Moves to Link Local and Global Order Books
The SFC revealed the policy shift during Hong Kong Fintech Week on November 3. Chief Executive Officer Julia Leung said the regulator decided after confirming that investor protection measures were strong enough. “Once we are sure that we can protect the investors, we do relax, as we did with the global liquidity,” she said.
Under the new approach, licensed exchanges will be allowed to link their domestic and international trading systems. This will connect local investors with global liquidity pools, offering better price discovery and efficiency. The change replaces the previous model that limited trading activities to Hong Kong residents and local institutions.
The adjustment brings Hong Kong closer to international digital asset trading practices. It also allows market participants to access deeper liquidity and more competitive prices. The policy marks another step toward positioning Hong Kong as a central hub for regulated digital finance.
Expanding Regulatory Frameworks and Market Access
The new policy forms part of Hong Kong’s broader financial modernization plan. Over the past three years, the city has introduced measures to strengthen its digital asset ecosystem. These include licensing virtual asset exchanges, approving Bitcoin and Ether exchange-traded products, and setting rules for digital asset fund managers.
In parallel, the Hong Kong Monetary Authority (HKMA) is working to establish a licensing framework for stablecoin issuers, custodians, and crypto dealers. The HKMA is expected to issue the first stablecoin licenses in 2026. Leung mentioned that future reforms may allow licensed crypto brokers, not just exchanges, to access global liquidity. “That’s for another day,” she said, indicating that more market openings could follow once the framework stabilizes.
Global Firms May Find Easier Entry
The SFC’s move could attract major international trading firms seeking entry into Asia’s digital asset markets. Companies like Binance and Coinbase could operate in Hong Kong through broker licenses instead of full exchange licenses, which are more complex and time-consuming to obtain.
A broker license would allow global firms to connect with Hong Kong’s capital pools while adhering to the city’s compliance requirements. According to the SFC, there are currently 11 licensed virtual asset exchanges and 49 authorized brokers offering crypto-related services. With the new access model, this number could rise as more global firms explore opportunities under the revised structure.
Balancing Market Growth and Investor Protection
While Hong Kong is opening its crypto markets, the SFC maintains strict oversight. Leung said the city remains cautious, emphasizing that compliance standards will not be lowered. The regulator aims to ensure transparency and build trust among institutional and retail investors.
Hong Kong’s approach differs from mainland China, where crypto trading remains banned. Instead, the city continues to balance regulation and innovation to foster a secure yet competitive market environment. The new policy reflects this balance, enabling exchanges to grow while maintaining investor safeguards.
The SFC’s latest move places Hong Kong in a stronger position to compete globally. By allowing crypto exchanges to access global liquidity, the city reinforces its role as a key financial bridge between Eastern and Western markets.
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