Hong Kong plans to introduce two new categories of virtual asset licences to enhance its regulatory framework!

It is understood that this regulatory framework upgrade coincides with the launch of a one-month public consultation period, signalling the extension of Hong Kong's virtual asset industry oversight from core trading activities to encompass the entire value chain. This further strengthens the institutional foundations for establishing the city as a ‘global virtual asset hub’.

The two proposed licence categories do not constitute a complete overhaul of the regulatory system, but rather serve as crucial additions to the existing framework. Previously, Hong Kong had established a licensing regime under the Anti-Money Laundering Ordinance (AMLO) for two core activities: ‘virtual asset trading’ and ‘virtual asset custody,’ effectively regulating compliance operations in the circulation of virtual assets. As the industry has evolved, the scale of derivative activities such as virtual asset advisory and asset management has continued to expand, highlighting regulatory gaps in these areas. The introduction of these two new licences specifically addresses this industry pain point.

From a regulatory perspective, this adjustment achieves comprehensive coverage of the virtual asset industry's core activities. The ‘Provision of Advice on Virtual Assets’ licence will regulate all forms of virtual asset investment advice and consultancy services, clarifying practitioner qualification requirements and service standards to prevent misleading information from deceiving investors. The ‘Virtual Asset Management’ licence, meanwhile, targets portfolio management activities where virtual assets constitute a significant proportion of holdings, strengthening asset security controls and investor rights protection. These two licences complement existing trading and custody licences, establishing a comprehensive regulatory framework spanning ‘trading-custody-consultancy-management’ to enhance industry transparency and standardisation.

A representative from the regulatory body stated that the public consultation will primarily gather market participants' views on licence application criteria, compliance requirements, and the delineation of regulatory responsibilities. After fully incorporating market feedback, the regulator will finalise unified legislative proposals for the four licences, aiming to submit a draft ordinance to the Legislative Council for deliberation by 2026. This phased approach ensures both the scientific rigour and practical feasibility of the regulatory policy while affording industry players sufficient time to adapt.

This regulatory framework enhancement has drawn widespread industry attention. Sector insiders widely acknowledge that Hong Kong's virtual asset sector owes its rapid development to clear regulatory guidance, with the introduction of these two new licence categories signalling Hong Kong's progression from ‘regulated development’ towards ‘high-quality development’. The establishment of a comprehensive regulatory system will not only effectively mitigate industry risks but also bolster international capital and industry players' confidence in the Hong Kong market. This will attract more high-quality resources, helping Hong Kong consolidate its competitive edge in the global virtual asset arena.