The virtual asset landscape in Hong Kong is undergoing a seismic shift, driven by regulatory clarity, institutional adoption, and growing investor interest. As the Hong Kong Monetary Authority (HKMA) prepares to implement the Stablecoin Ordinance on August 1, 2025, the market is poised for a new era of compliance, innovation, and opportunity.
This landmark regulation will allow the HKMA to begin accepting license applications for stablecoin issuers — marking Hong Kong as the first jurisdiction globally to introduce a comprehensive regulatory framework for fiat-backed stablecoins. The move underscores Hong Kong’s ambition to become a leading international virtual asset hub, attracting global players while ensuring market integrity and investor protection.
At the heart of this transformation is a surge in institutional participation. Guotai Junan International (01788.HK) made headlines as the first mainland Chinese broker in Hong Kong to obtain full licensing for virtual asset trading services. The announcement triggered a sharp rise in its stock price, hitting a decade-high — a clear signal of investor confidence in the region's digital asset future.
But what does this mean for everyday investors? And how can they navigate this rapidly evolving space?
What Are Virtual Assets?
Virtual assets are digital representations of value, often built on blockchain technology. These include cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), utility tokens, security tokens, and stablecoins — digital currencies pegged to real-world assets such as the U.S. dollar or gold.
In Hong Kong, the Securities and Futures Commission (SFC) mandates that all retail investors must trade virtual assets only through licensed platforms. As of June 30, 2025, there are 11 licensed virtual asset exchanges, including prominent names like OSL and HashKey Exchange.
HashKey Exchange stands out as Hong Kong’s largest licensed platform and was the first to open services to retail investors in August 2023. It currently ranks #17 globally on CoinGecko, reflecting its growing influence.
👉 Discover how to access compliant crypto trading platforms today.
Convenient and Regulated Access for Investors
Beyond direct exchange accounts, investors now have seamless access via traditional financial institutions. Over 42 firms — including 39 brokers, one bank, one asset manager, and one internet company — have upgraded their Type 1 (securities trading) licenses to offer virtual asset services.
These institutions use omnibus accounts at licensed exchanges like HashKey to provide front-end trading interfaces within their existing apps. This means investors can trade Bitcoin, Ethereum, and stablecoins directly from their brokerage accounts — no separate registration needed.
For example, after opening a standard securities account, users can apply for a Virtual Asset (VA) trading sub-account, enabling them to trade spot crypto, virtual asset ETFs (both Hong Kong and U.S.-listed), and even private funds — all within a single app.
While Guotai Junan International has secured its license, its crypto trading features are not yet live. A customer service representative confirmed: “The company has obtained the license, but specific tradable assets will be announced after August.”
However, collaboration is already underway. According to Zhuyu Zhu, Sales Director at HashKey Exchange, several top-tier Chinese brokers have completed system integration and are preparing to launch services imminently.
Pioneers in the Retail Crypto Space
Hong Kong’s local brokers were ahead of the curve. Victory Securities became the first local firm approved for retail crypto trading in November 2023. By April 2024, it launched VictoryX, the city’s first all-in-one stock-and-crypto app that supports “crypto-in, crypto-out” functionality — meaning users can deposit and withdraw crypto directly without managing exchange wallets.
From April 2024 to March 2025, Victory Securities recorded over HK$10 billion in crypto trading volume, ranking it #1 among Hong Kong brokers in this segment.
Other major players include:
- Futu Securities, partnering with HashKey Exchange
- Interactive Brokers, collaborating with OSL Group
Both launched crypto trading services in 2024 and 2023 respectively — demonstrating strong early momentum.
Diversified Crypto Investment Products in Hong Kong
The range of available virtual asset products continues to expand:
1. Direct Cryptocurrency Trading
Investors can buy and sell major coins like BTC, ETH, and stablecoins either directly on licensed exchanges or indirectly through broker-integrated platforms.
2. Spot and Futures ETFs
In April 2024, Hong Kong debuted its first spot Bitcoin and Ethereum ETFs, issued by CSOP Asset Management, Harvest Fund, and Bosera International. With an entry cost of around HK$800 per share, these ETFs significantly lowered the barrier to entry.
Additionally, futures-based ETFs from Southern Asset Management and Samsung Asset Management track CME Bitcoin and Ethereum futures contracts.
As of late May 2025:
- 6 spot ETFs and 3 futures ETFs are listed on the Hong Kong Stock Exchange
- Total AUM of spot ETFs exceeds HK$3.8 billion
3. Virtual Asset Portfolios for Professional Investors
Forty-one asset managers have upgraded to SFC Type 9 licenses (asset management), allowing them to manage portfolios with more than 10% exposure to virtual assets. Firms like Victory Securities, CSOP, and Bosera are actively offering such products to qualified investors.
⚠️ Important Note: Mainland Chinese residents are currently prohibited from accessing these services. Per SFC guidelines and internal policies at firms like Guotai Junan International, individuals with mainland IDs cannot open or use virtual asset trading accounts — even if based in Hong Kong.
Why Stablecoins Are Powering the Market Surge
While Bitcoin remains the flagship crypto asset — recently breaking $110,000 and surpassing Amazon in market cap — it's the rise of stablecoins that's fueling structural change.
Stablecoins are digital currencies backed by reserves (e.g., USD or government bonds), designed to minimize volatility. As of May 2025:
- Global stablecoin issuance exceeds $235 billion
- Tether (USDT) dominates with over $150 billion in circulation — nearly two-thirds of the market
Tether reported over $13 billion in net profit in 2024, outpacing Citigroup. Meanwhile, Circle — issuer of USDC — saw its valuation multiply nearly fivefold after going public in early 2025.
Regulatory progress is accelerating adoption:
- 🇭🇰 Hong Kong’s Stablecoin Ordinance takes effect August 1
- 🇺🇸 The U.S. Senate passed the GENIUS Act in June 2025, establishing a federal framework for USD-backed stablecoins
👉 Learn how stablecoins are reshaping global finance.
Risks and Regulatory Challenges
Despite the optimism, risks remain:
- Issuer risk: Not all stablecoins are equally secure. BUSD was phased out in 2023 after regulators flagged compliance issues.
- Transparency concerns: Past scrutiny over Tether’s reserve disclosures highlights the need for regulatory oversight.
- Jurisdictional differences: The U.S. requires full U.S. Treasury backing; Hong Kong mandates at least 80% cash-like reserves.
Hong Kong’s broader vision is outlined in its "Digital Asset Development Policy Statement 2.0", released in June 2025. It reinforces the SFC as the primary regulator for digital asset service providers, while the HKMA oversees banks’ digital asset activities.
The SFC’s A-S-P-I-Re roadmap further details plans across five pillars: Access, Safeguards, Products, Infrastructure, and Relationships — aiming to foster tokenized securities and compliant DeFi innovation.
Market Outlook and Growth Potential
According to research firm Zhongyan Pu Hua:
- Hong Kong’s digital asset sector reached HK$112 billion in 2024
- Expected to exceed HK$150 billion in 2025, growing at over 35% CAGR
With global crypto market cap now exceeding $3.26 trillion, Hong Kong’s share remains small — indicating vast untapped potential.
Frequently Asked Questions (FAQ)
Q: Can mainland Chinese residents trade crypto in Hong Kong?
A: No. Both regulatory policy and broker compliance rules prohibit mainland ID holders from accessing virtual asset trading services in Hong Kong.
Q: When will Guotai Junan International launch crypto trading?
A: Services are expected to roll out after August 1, 2025, following official guidance under the new Stablecoin Ordinance.
Q: What are the safest stablecoins to invest in?
A: Choose those issued by regulated entities with transparent reserves — such as USDT (Tether) or USDC (Circle), especially under upcoming HKMA oversight.
Q: How do I start investing in crypto ETFs in Hong Kong?
A: Open a VA-enabled account with a licensed broker like Futu or Victory Securities, then trade ETFs directly through their app.
Q: Is Hong Kong’s crypto regulation stricter than the U.S.?
A: Both regions are tightening rules. Hong Kong focuses on reserve adequacy (≥80% cash-like assets), while the U.S. demands full backing in short-term Treasuries.
Q: Are profits from crypto trading taxable in Hong Kong?
A: Currently, capital gains from personal crypto investments are not taxed. However, businesses or frequent traders may be subject to profits tax.