Overview
Hong Kong's crypto framework in 2026 runs on three tracks. The SFC Virtual Asset Trading Platform (VATP) regime under AMLO Part 5B has been live since 1 June 2023 and dual-licenses platforms that trade security tokens under SFO Type 1 (dealing in securities) and Type 7 (automated trading services). The HKMA Stablecoin Issuer regime under the Stablecoins Ordinance (Cap. 656) came into force on 1 August 2025 and has now issued its first two licences. A third regime — for VA dealers (including OTC) and VA custodians — is in consultation under the FSTB/SFC ASPIRE roadmap and is expected to legislate in 2026.
What this means in practice: if you run an exchange in or targeting Hong Kong, VATP is compulsory; if you issue a fiat-referenced stablecoin in Hong Kong or any HKD-referenced stablecoin globally, HKMA authorisation is compulsory; and if you run OTC desks or standalone custody, a new SFC regime is coming this year.
Regulators — SFC and HKMA
The Securities and Futures Commission (SFC) issues VATP licences through its Intermediaries Division under AMLO and the Securities and Futures Ordinance (SFO, Cap. 571). Enforcement sits in a dedicated division. The Fintech Unit runs the VATP-related innovation programmes and the swift-licensing process extended to all new applicants since 18 December 2024.
The Hong Kong Monetary Authority (HKMA) is the regulator for fiat-referenced stablecoin issuers, operating under the Stablecoins Ordinance and its 29 July 2025 guidelines. HKMA's Banking Department, which also handles authorised institution supervision, runs the stablecoin dossier. For upcoming VA dealer and custodian licences, the SFC will again be the lead regulator.
Track 1 — SFC Virtual Asset Trading Platform licence
Any person operating a VA exchange in Hong Kong, or actively marketing such services to the Hong Kong public, must be SFC-licensed under AMLO Part 5B — regardless of whether the tokens traded are securities. If the platform trades tokens that qualify as securities under the SFO, an SFO Type 1 + Type 7 licence is issued in parallel with the AMLO licence. This is the dual-licensing model.
Minimum financial resources
| Metric | Threshold |
|---|---|
| Paid-up share capital | HKD 5,000,000 |
| Liquid capital | HKD 3,000,000 |
| Liquid assets in Hong Kong | ≥ 12 months of actual operating expenses, rolling |
Responsible Officers (ROs)
Minimum two ROs. At least one must ordinarily reside in Hong Kong and at least one must also be a director of the licensee. Under dual licensing the same two individuals can satisfy both AMLO and SFO requirements if dually licensed — there is no need for four distinct ROs.
Ongoing VATP obligations
- Token due diligence and written admission criteria.
- Custody via a wholly-owned subsidiary with ≥98% of client VAs in cold storage.
- Insurance cover for at least 50% of client VAs held in hot storage.
- Retail investor suitability assessment and knowledge tests.
- Proof-of-reserves published on a defined cadence.
- Prohibition on proprietary trading.
- Market-surveillance system and annual independent external assessment (single-phase since 16 January 2025).
Track 2 — HKMA Stablecoin Issuer licence
Under the Stablecoins Ordinance (Cap. 656), any person issuing a fiat-referenced stablecoin in Hong Kong — or issuing any HKD-referenced stablecoin globally — requires HKMA authorisation. Marketing an FRS to the Hong Kong public is also in scope.
Financial resources
| Metric | Threshold |
|---|---|
| Paid-up share capital | HKD 25,000,000 |
| Liquid capital | HKD 3,000,000 |
| Excess liquid capital | ≥ 12 months operating expenses |
Core obligations
- 100% reserve backing at all times, held in high-quality liquid assets.
- Full segregation of reserve assets from the issuer's own assets.
- Absolute redemption right at par — T+1 settlement unless HKMA consents to a longer window.
- Hong Kong-incorporated entity or an HKMA-authorised institution, with locally based senior management.
HKMA issued the first two stablecoin-issuer licences on 10 April 2026 — to HSBC and Anchorpoint Financial (a Standard Chartered / HKT / Animoca Brands joint venture) — out of 36 applications received by 30 September 2025. The first batch covers HKD-referenced and multi-fiat-referenced programmes; no pure USD-referenced or offshore-USD stablecoin has been HKMA-licensed yet.
Track 3 — upcoming VA Dealer and VA Custodian regimes
On 27 June 2025 the FSTB and SFC published joint consultation papers on dedicated regimes for VA dealers (including OTC spot) and VA custodians, under the ASPIRE roadmap (Pillar A). This supersedes the February 2024 FSTB proposal that had placed OTC under Customs & Excise. Legislation is expected in 2026; final capital and scoping thresholds have not been gazetted and should not be assumed. If your business plan touches OTC spot or standalone custody, plan around a 2026 licensing dialogue rather than an existing regime.
High-level application checklist (VATP)
- Incorporate a Hong Kong company or register a non-HK company with a permanent place of business in HK.
- Appoint at least two Responsible Officers (one HK-resident, one a director) who pass SFC fit-and-proper and competence tests.
- Appoint a Manager-in-Charge for each core function under the MIC regime.
- Meet paid-up capital (HKD 5M) and liquid capital (HKD 3M) and evidence 12 months of opex liquidity.
- Set up a wholly-owned VA custodian subsidiary with ≥98% cold storage and hot-storage insurance.
- Build a token due-diligence and admission/review committee.
- Implement AML/CFT aligned with AMLO Schedule 2 and the SFC VATP Guidelines, including Travel Rule since 1 June 2023.
- Adopt a cybersecurity framework aligned with SFC expectations; ISO 27001 is market practice.
- Engage an SFC-acceptable external assessor (single consolidated report since January 2025).
- Submit business plan, financial projections, risk-management framework and compliance manual.
- For dual licence: run AMLO plus SFO Type 1 and Type 7 filings in parallel with the same dually-licensed ROs.
- Ongoing: audited accounts, proof-of-reserves, SFC reporting, and FRR-equivalent returns.
Process and timeline
| Stage | VATP | Stablecoin issuer |
|---|---|---|
| Application preparation | 3–6 months | 4–8 months |
| Regulator review | 6–12 months | 9–15 months |
| External assessment (parallel) | single-phase since Jan 2025 | parallel |
| End-to-end | 9–18 months | 12–24 months |
The SFC's public performance pledge is up to 15 weeks per licensing application, but VATP applications routinely run longer due to external-assessment cycles. The swift-licensing process has been extended to all new VATP applicants filing after 18 December 2024, which materially compresses the review for well-prepared files.
Taxation
- Corporate profits tax: two-tier — 8.25% on the first HKD 2,000,000 of assessable profits, 16.5% above. Territorial principle applies.
- No VAT, no GST, no capital gains tax on VAs.
- No stamp duty on virtual assets (they are not Hong Kong stock).
- Gains from genuine long-term investment in VAs are generally non-taxable; trading income falls inside the ordinary profits-tax base. The Inland Revenue Department's DIPN 39 (revised) sets out the IRD view.
FAQ
Do I need a Hong Kong VATP licence to serve only foreign clients from HK?
Yes — if any part of the operation is “carried on in Hong Kong” under AMLO Part 5B, or if the service is actively marketed to the Hong Kong public, a VATP licence is required regardless of client geography. Pure foreign-client servicing run from a HK office typically does not fall outside the regime.
Is dual licensing mandatory or only if I list security tokens?
Dual licensing (AMLO VATP plus SFO Type 1 + Type 7) is triggered if the platform lists any token that qualifies as a security under the SFO. If all listed tokens are non-security, the VATP licence alone is sufficient — but most platforms prepare for dual filing because the token perimeter can change.
How do the first HKMA stablecoin licensees compare?
Both HSBC and the Standard Chartered / HKT / Animoca-led Anchorpoint Financial JV received licences on 10 April 2026. The first batch focuses on HKD-referenced and multi-fiat-referenced programmes. No purely USD-referenced stablecoin has been HKMA-authorised yet — the regime's capture by design prioritises HKD-reference and HK-linked FRS.
Can I use the Cayman / BVI parent + HK operating sub structure?
Yes, and it remains the dominant model. The licensed entity is the Hong Kong operating company; capital, ROs and substance sit there. IRD DIPN 39 and the territorial-source principle support tax planning, subject to transfer-pricing substance.
Is the OTC regime already live?
Not yet. OTC spot is expected to fall under a new SFC-led VA Dealer regime legislating in 2026. The February 2024 FSTB proposal that had placed OTC under Customs & Excise was superseded in June 2025.