Stablecoin Boom Ignites Hong Kong’s Virtual Asset Market

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The virtual asset landscape in Hong Kong is undergoing a seismic transformation, driven by regulatory advancements and growing institutional participation. With the Stablecoins Ordinance set to take effect on August 1, 2025, the city is positioning itself as a global hub for digital finance. This milestone marks the world’s first comprehensive regulatory framework for fiat-backed stablecoins — a move poised to reshape investor access, market infrastructure, and financial innovation across Asia.

The Rise of Regulated Virtual Asset Trading

Virtual assets refer to digitally represented value, including cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), utility tokens, asset-backed tokens, and stablecoins. These assets are typically built on blockchain technology, enabling secure, transparent, and decentralized transactions.

In Hong Kong, the Securities and Futures Commission (SFC) mandates that investors trade virtual assets only through licensed platforms. As of June 30, 2025, there are 11 approved virtual asset exchanges, including prominent names such as HashKey Exchange and OSL. These platforms support direct fiat deposits in Hong Kong dollars and US dollars, allowing seamless onboarding for retail and institutional investors alike.

👉 Discover how regulated crypto trading is reshaping investment opportunities in Asia.

Among them, HashKey Exchange stands out as Hong Kong’s largest licensed platform. Ranked #17 globally on CoinGecko as of June 2025, it made history in August 2023 by becoming the first exchange to open retail trading to the public, launching Bitcoin and Ethereum spot markets. This marked a pivotal shift toward mainstream adoption of digital assets under full regulatory oversight.

Beyond dedicated exchanges, 42 financial institutions — including 39 brokers, one bank, one asset manager, and one fintech firm — have upgraded their Type 1牌照 (Securities Dealing) to offer virtual asset services. These firms provide clients with omnibus accounts linked to licensed exchanges, enabling users to trade crypto directly within familiar brokerage apps.

This integration significantly enhances accessibility. Investors can now apply for a Virtual Asset (VA) trading account alongside their traditional securities portfolio — no separate exchange registration required. All trading, from spot crypto to ETFs and private funds, can be managed in a single app.

Institutional Momentum: Brokers Enter the Crypto Arena

A major catalyst in this evolution was CITIC Securities International (HK) becoming the first mainland Chinese broker to receive full approval for end-to-end virtual asset services. While its “Junhong Global Connect” app hasn't yet launched crypto trading, the firm confirmed that specific offerings will roll out after August 2025, pending official guidance.

According to HashKey’s sales director Zhu Zhenyu, several leading Chinese brokers have already completed system integrations and licensing upgrades and are preparing to launch crypto services imminently.

Meanwhile, local players have been ahead of the curve. Victory Securities became the first Hong Kong broker approved for retail crypto trading in November 2023. In April 2024, it launched VictoryX, the city’s first all-in-one stock-and-crypto trading app. Notably, VictoryX supports “crypto-in, crypto-out” functionality — meaning users can deposit and withdraw digital assets without needing a separate exchange wallet.

As of March 31, 2025, Victory Securities had facilitated over HK$10 billion in cumulative crypto trading volume, ranking it at the top among Hong Kong brokers.

Other key partnerships include:

These collaborations reflect a broader trend: traditional finance is embracing digital assets, creating a more robust and trustworthy ecosystem for investors.

Diversified Crypto Investment Products in Hong Kong

Hong Kong’s virtual asset market now offers multiple avenues for exposure:

1. Direct Cryptocurrency Trading

Investors can buy and sell major coins like BTC, ETH, and stablecoins via licensed exchanges or broker-integrated platforms.

2. Spot and Futures ETFs

In April 2024, Hong Kong launched Asia’s first batch of spot Bitcoin and Ethereum ETFs, issued by华夏 Hong Kong, Harvest International, and Boshi International. With minimum investments around HK$800 per share, these ETFs dramatically lowered entry barriers.

Additionally, futures-based ETFs from institutions like Southbound Fund (SBF) and Samsung Asset Management track CME-traded Bitcoin and Ethereum futures contracts.

As of late May 2025:

👉 Learn how ETFs are making crypto investing more accessible than ever.

3. Virtual Asset Portfolio Funds

Forty-one asset managers hold SFC Type 9 licenses (Asset Management), allowing them to manage portfolios with more than 10% allocation to digital assets. Firms like Victory Securities, Harvest, and Boshi offer structured products tailored for professional investors.

Why Stablecoins Are the Game-Changer

While Bitcoin remains the flagship crypto asset, stablecoins are emerging as the true engine of growth. Pegged to real-world assets — usually the US dollar — stablecoins offer price stability while enabling participation in blockchain-based finance.

Two major jurisdictions are leading regulatory efforts:

Globally, stablecoin issuance has surged past **$235 billion** — rivaling Visa’s transaction volume in just five years. **Tether (USDT)** dominates with over $150 billion in circulation, capturing nearly two-thirds of the market.

Tether reported over $13 billion in net profit in 2024, surpassing Citigroup. Meanwhile, Circle — issuer of USDC — saw its valuation multiply nearly fivefold after its U.S. IPO, earning the nickname “the first stablecoin stock.”

For investors, stablecoins aren’t about capital appreciation but yield generation:

However, risks remain — particularly issuer risk. Past incidents like the BUSD shutdown due to regulatory pressure highlight the importance of choosing compliant, transparent issuers.

Regulatory Vision: Building a Global Digital Asset Hub

Hong Kong is actively shaping its future as an international digital finance center. In February 2025, the SFC unveiled its A-S-P-I-Re roadmap, outlining five strategic pillars:

This framework guides innovation in tokenized securities and regulated DeFi while ensuring investor protection.

Further reinforcing this vision, the Hong Kong government released the Digital Assets Policy Declaration 2.0 in June 2025. It confirms:

Market projections are bullish:

Despite global crypto market cap hitting $3.26 trillion (CoinMarketCap, June 2025), Hong Kong still holds vast untapped potential.

Frequently Asked Questions

Q: Can mainland Chinese residents trade crypto in Hong Kong?
A: No. Under current SFC rules, licensed platforms and brokers are prohibited from offering virtual asset services — including ETFs — to mainland residents.

Q: Is Hong Kong introducing its own local stablecoin?
A: Not yet. While discussions around a Hong Kong dollar-backed stablecoin exist, no official launch has been announced.

Q: What are the main risks of investing in stablecoins?
A: The primary risk is issuer solvency and transparency. Always choose stablecoins backed by audited reserves and regulated entities.

Q: How does the Stablecoins Ordinance protect investors?
A: It requires issuers to maintain at least 80% cash-like reserves, undergo regular audits, and comply with strict disclosure rules — enhancing trust and stability.

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.

👉 Stay ahead of regulatory shifts shaping the future of digital finance.

Core Keywords

The convergence of regulation, institutional adoption, and product innovation has placed Hong Kong at the forefront of Asia’s digital finance revolution. As August 1 approaches and stablecoin regulation kicks in, a new era of secure, scalable, and inclusive crypto investing is unfolding — offering global investors unprecedented access to one of the world’s most dynamic financial markets.