Reuters, Hong Kong, February 19 In an effort to increase its competitiveness as a hub for digital assets and draw in money, Hong Kong’s financial regulator said on Wednesday that the city is thinking of allowing some investors to use margin loans and derivatives in virtual assets. Following Beijing’s comprehensive prohibition on all cryptocurrency transactions in mainland China the year before, Hong Kong initially outlined plans to become a virtual asset trading center in 2022.
Since then, it has started a number of projects, including the first spot cryptocurrency exchange-traded funds in Asia.
At CoinDesk’s Consensus Hong Kong 2025 conference, Securities and Futures Commission (SFC) CEO Julia Leung stated, “We are considering derivative products for professional investors, margin lending for certain customers,” with reference to digital assets.
Hong Kong is making significant strides in the digital asset space, aiming to position itself as a regional hub for virtual assets. The city’s financial regulator, the Securities and Futures Commission (SFC), is considering approving new cryptocurrency and virtual asset products as derivatives and margin lending for certain investors. This move is part of Hong Kong’s broader strategy to expand its services to investors and boost its competitiveness in the global digital asset market.
Regulatory Initiatives: Hong Kong’s Securities and Futures Commission (SFC) is considering approving new cryptocurrency and virtual asset products as derivatives and margin lending for professional investors.
The SFC’s CEO, Julia Leung, announced at the Consensus Hong Kong 2025 conference that the plans are being assessed to cater to professional investors and certain customers. This initiative follows Hong Kong’s earlier efforts to become a virtual asset hub, which began in 2022 after Beijing’s sweeping ban on all crypto transactions in mainland China. Since then, Hong Kong has launched the first spot crypto exchange-traded funds in Asia and issued nine digital asset trading platform licenses, with eight more applications under consideration.
Previous Efforts: Hong Kong has already launched the first spot crypto exchange-traded funds in Asia and issued nine digital asset trading platform licenses.
Hong Kong’s Financial Secretary, Paul Chan, also highlighted the city’s commitment to advancing the regulation of stablecoins, which are cryptocurrencies designed to maintain a stable value. This move is expected to provide more stability and confidence in the digital asset market, attracting more investors and capital to the region.
Stablecoin Regulation: The city is also focusing on advancing the regulation of stablecoins to provide more stability and confidence in the digital asset market.
The push towards crypto derivatives and margin lending is not unique to Hong Kong. Other global financial hubs like Singapore and Dubai are also vying to become leading centers for virtual assets. The competition among these cities underscores the growing importance of digital assets in the global financial landscape.
Global Competition: Other global financial hubs like Singapore and Dubai are also competing to become leading centers for virtual assets.
The price of Bitcoin, the leading cryptocurrency, has seen significant fluctuations over the past year. It more than doubled in value last year, reaching an all-time high of $109,071 on January 20, 2025, the day of Donald Trump’s inauguration. However, it has since pulled back to around $96,000. Despite these fluctuations, the overall trend indicates a growing interest and investment in cryptocurrencies.
Market Trends: The price of Bitcoin has seen significant fluctuations, indicating a growing interest and investment in cryptocurrencies.
Paul Chan, the city’s financial secretary, informed the audience that nine virtual asset trading platform (VATP) licenses had been granted by the city’s authorities thus far. CoinDesk, a cryptocurrency news website owned by Bullish Group, a cryptocurrency exchange, said on Tuesday that it had received one of the licenses. Eight additional applications are reportedly being reviewed, according to Leung, while Chan stated that the government is also attempting to further regulate stablecoin cryptocurrencies.
According to Leung, Hong Kong’s SFC will publish a roadmap for virtual assets with comprehensive expansion plans later on Wednesday. In addition to Hong Kong, Singapore and Dubai also hope to establish themselves as major worldwide hubs for virtual assets. Agreement With speakers expressing a positive outlook on the regulatory landscape and promises of crypto-friendly policies, Hong Kong is the first significant meeting of the crypto sector since U.S. President Donald Trump took office last month.
Binance Holdings CEO Richard Teng stated, “There’s a big shift in sentiment in the U.S.”
He claimed that instead of arguing over whether or not to invest in cryptocurrency, some sovereign wealth funds and institutional investors are now figuring out how much to put down. Justin Sun, the creator of the Tron blockchain network, stated separately to a panel that he had invested in World Liberty Financial, a recently established cryptocurrency business that is partially controlled by Trump, due to its emphasis on “bridging traditional finance with the crypto world.”
Last year, the price of bitcoin more than doubled. On January 20 of this year, the day of Trump’s inauguration, it reached an all-time high of $109,071, but it has since fallen to around $96,000.
Hong Kong’s efforts to become a digital asset hub are part of a broader trend of increasing acceptance and integration of cryptocurrencies into the financial system. As more countries and regions recognize the potential of digital assets, the regulatory landscape is evolving to provide a more stable and secure environment for investors.
In conclusion, Hong Kong’s move to approve crypto derivatives and margin lending is a significant step towards establishing itself as a leading digital asset hub. By providing a regulatory framework that supports innovation and investor confidence, Hong Kong is positioning itself to attract more capital and talent in the rapidly growing digital asset market. As the global financial landscape continues to evolve, the competition among financial hubs will likely intensify, driving further advancements in the digital asset space.
