Hong Kong is set to open the doors wider for crypto trading by allowing locally licensed crypto exchanges to tap into global order books. The city’s top regulator at the Securities and Futures Commission (SFC), Julia Leung, announced the move at the city’s flagship fintech event.
Until now, crypto trading platforms in Hong Kong were required to match orders only within the territory, a “ring-fenced” model that limited access to the broader global pool of buyers and sellers. With the change, licensed platforms will be allowed to connect local entities with their overseas affiliates’ order books, boosting liquidity and making the market more open.
Leung explained the regulatory change by saying, “You can say we are on the tougher side. Once we are sure that we are able to protect the investors, we do relax, as we did with the global liquidity.”
Why this Matters
This policy tweak is a significant step in Hong Kong’s long-running push to become a regional hub for digital assets. Over the past three years, the city has taken key actions like introducing a licensing regime for crypto platforms, listing exchange-traded products that track crypto tokens like Bitcoin and Ether, and setting up oversight for digital-asset funds. But despite those steps, trading volumes and activity remain modest compared with major global hubs such as the U.S.
Opening access to global order books may help remedy that gap. With more participants and deeper liquidity, local traders could gain access to tighter spreads, more trades, and better execution. It also potentially invites international players to set up or expand operations in Hong Kong.
What’s Changing
Licensed crypto trading platforms under the SFC will now be allowed to link with their global order books and overseas affiliates, rather than operate solely within Hong Kong. The city is also finalising rules for licensing crypto dealers and custodians, and next year the city expects to issue licences for stablecoin issuers.
In a later phase, the SFC may allow locally licensed crypto brokers to access global liquidity pools. Leung said this is “for another day.” As part of the relaxations, crypto exchanges in Hong Kong may list new tokens and stablecoins approved by the HKMA for professional investors, without the previous 12-month issuance track record and liquidity requirements.
Potential Benefits and Risks
As for Benefits, greater liquidity and trading flexibility for Hong Kong-licensed platforms might attract more international business. Better competitiveness against other digital-asset hubs in Asia and globally. Thus, local investors may benefit from more options and possibly tighter trading conditions.
But with access to global order-books comes increased complexity in risk management and compliance and regulators will need to continue ensuring investor protection, particularly as global integration increases. Leung’s comment underscores that the regulatory easing comes only once investor safeguards are in place. If global players expand into Hong Kong swiftly, local smaller platforms might face stronger competition.
Final Thoughts
While the new policy represents a meaningful opening, Hong Kong still has work to do in its push to become a major crypto hub. Getting more trading activity, deeper ecosystems, and credible global operators on board will be key. The move to allow brokers in addition to exchanges access to global liquidity could be a game-changer, especially for large global companies such as Binance Holdings Ltd or Coinbase Global Inc., which might prefer a broker licence model rather than a full exchange licence.
The formal regulatory circular from the SFC is expected imminently, which will clarify the implementation timeline and detailed requirements. For now, the message from Hong Kong is clear, the city is willing to ease crypto-trading rules in exchange for becoming a more global player, so long as investor protections remain front and center.
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