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Hong Kong promotes a risk-based digital asset regime while positioning itself as a regulated fintech hub. Proposed rule changes could end the 10% crypto exemption for asset managers, raising compliance demands. Industry groups warn that tighter licensing and custody rules may limit cautious crypto exposure by funds. Hong Kong’s approach to regulating digital assets was in focus this week after the city’s finance chief outlined its strategy on the global stage, even as parts of the financial industry raised concerns about proposed rule changes at home. Speaking at a closed-door workshop during the annual meeting of the World Economic Forum in Davos, Switzerland, Hong Kong Financial Secretary Paul Chan Mo-po described the city’s digital asset regime as designed to balance innovation with financial stability. Chan said finance and technology were increasingly interconnected and required oversight that supported development while addressing systemic risks. According to Chan, digital assets can improve transparency, strengthen risk management processes, and enable more efficient capital flows. He reiterated Hong Kong’s regulatory principle of “same activity, same risk, same regulation,” framing it as a basis for what officials consider responsible and sustainable market development. Chan also said the government and regulators view themselves as market enablers, setting examples through policy and implementation. Hong Kong has prioritized its role as a regional fintech hub in recent years. Chan noted that since 2023, the city has issued three batches of tokenised green bonds, totalling US$2.1 billion. He also pointed to the existing licensing regime for virtual asset trading platforms and a pilot programme launched last November by the Hong Kong Monetary Authority, which facilitates real-value transactions using tokenised deposits and digital assets. Industry Pushback on Proposed Rule Changes While officials promote regulatory clarity, industry groups have expressed reservations. The Hong Kong Securities and Futures Professionals Association submitted a filing…

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Filed under: News - @ January 21, 2026 8:27 pm