Hong Kong’s primary and secondary virtual asset markets are still evolving, with significant developments and challenges ahead.
Key Developments in 2024
- 7 licensed virtual asset trading platforms approved for Type 1, Type 7, and AMLO licenses.
- 6 virtual asset spot ETFs listed on the Hong Kong Stock Exchange.
- 31 brokerages upgraded to virtual asset Type 1 licenses.
- 36 asset managers upgraded to virtual asset Type 9 licenses.
- Notable RWA (Real-World Asset) initiatives, including over HKD 6 billion in multi-currency digital green bonds and collaboration between Ant Group and GCL on a HKD 200+ million solar asset RWA.
Despite progress, challenges remain:
- Primary Market Barriers: Strict asset screening limits emerging crypto assets.
- Secondary Market Constraints: Mainland China’s policy restrictions narrow funding sources to local and overseas users, competing with global giants like Binance and Coinbase.
Core Question for 2025: How can Hong Kong balance market safety with innovation to attract traditional capital ("old money")?
Licensed Virtual Asset Platforms
As of January 11, 2025, 7 platforms are fully licensed by Hong Kong’s Securities and Futures Commission (SFC):
OSL and HashKey Lead the Market
- OSL: First AMLO-licensed platform (April 2024), focusing on spot ETFs and RWA.
- HashKey: Launched institutional service HashKey Pro, with HKD 580 billion in cumulative trading volume.
HKVAX: Rising Star in RWA
- Licensed in October 2024, specializing in Security Token Offerings (STOs) and RWA.
- Partnerships with Fórum Oceano and Alibaba Cloud.
4 New Entrants (December 2024)
- HKbitEX, Accumulus, DFX Labs, and EX.IO received licenses, expanding market diversity.
Regulatory Clarity: SFC’s December 2024 guidelines streamlined licensing for 11 pending applicants, fostering growth.
Virtual Asset Spot ETFs
Hong Kong’s 6 spot ETFs (launched April 2024) distinguish themselves with in-kind redemptions, allowing direct Bitcoin/ETH exchanges.
- Trading Volume: HKD 52.57 billion (2024).
- AUM Growth: +66% since launch.
Impact: ETFs bridge traditional finance and virtual assets, potentially unlocking "old money" liquidity.
Brokerages and Asset Managers
Key Players
- Tiger Securities: Entered market May 2024, offering 18 virtual assets.
- Victory Securities: Pioneer in compliant services, including stablecoin-structured products.
Market Expansion:
- 31 brokerages upgraded to Type 1 licenses.
- 36 asset managers upgraded to Type 9 licenses.
Outlook: Institutions are positioning for RWA growth in 2025.
RWA: The Next Frontier
Government Initiatives
- HKD 6B Digital Green Bonds: Multi-currency blockchain bonds (February 2024).
- Ensemble Sandbox: Tests tokenized deposits and wCBDC (March 2024).
Private Sector Moves
- Ant Group & GCL: HKD 200M+ solar RWA (December 2024).
- STBL Tokens: Short-term asset-backed notes by Cinda International (December 2024).
Regulatory Progress:
- Stablecoin Sandbox (July 2024) with JD.com, SCB, and others.
- Draft Stablecoin Bill (December 2024) aims to balance innovation and risk.
FAQ
Q1: What’s unique about Hong Kong’s virtual asset ETFs?
A1: They support in-kind redemptions, allowing direct crypto-for-ETF exchanges.
Q2: How many brokerages can trade virtual assets?
A2: 31 hold Type 1 licenses as of January 2025.
Q3: What’s driving RWA growth?
A3: Tokenization improves liquidity and transparency for real-world assets like bonds and solar projects.
👉 Explore Hong Kong’s virtual asset regulations
Looking Ahead to 2025
Hong Kong’s 2024 achievements laid a foundation for deeper virtual-traditional finance integration. Stablecoins and RWAs will be pivotal in 2025, provided the city balances innovation with robust oversight.