Hong Kong Plans Flexible Capital Requirements for Crypto on Bank Balance Sheets

According to local reports, the Hong Kong Monetary Authority (HKMA) has drafted new rules that would loosen capital requirements for lenders engaging with certain cryptocurrencies. The policy is still in consultation, but it would give banks more room to work with tokens tied to open blockchain networks if those projects can show strong risk safeguards.

Basel Rules, Local Application

The guidance comes as Hong Kong prepares to adopt the Basel Committee’s international capital standards in 2026. Rather than simply applying the rules wholesale, the HKMA is tailoring them to address permissionless blockchains — a cornerstone of the digital asset economy. The regulator’s stance suggests a willingness to recognize the difference between speculative tokens and assets with credible governance structures.

Contrast With Mainland China

The move highlights Hong Kong’s diverging path from mainland China, where crypto activity remains outlawed. In the city, by contrast, officials have built out licensing frameworks for exchanges and stablecoin issuers, signaling that they intend to welcome digital asset business under strict regulatory oversight.

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A Growing Web of Rules

The HKMA’s proposal is not happening in isolation. In August, the Securities and Futures Commission rolled out new requirements for licensed trading platforms, forcing them to bolster custody arrangements for customer holdings. Step by step, Hong Kong is creating a layered regulatory environment meant to attract institutional players while reassuring investors that protections are in place.

If finalized, the softer capital rules could encourage local banks to participate more directly in the digital asset market — something few jurisdictions have attempted so far. For Hong Kong, it’s another signpost on the road to becoming Asia’s most active crypto-financial center.

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