Hong Kong consolidates its Virtual Asset Regulatory Framework and positions its gold market

Hong Kong continues its ambition to become a leading international financial center by gradually establishing a robust regulatory framework for the virtual assets sector. The Financial Services and the Treasury Bureau, in collaboration with the Securities and Futures Commission, is actively working to realize this regulatory vision by structuring digital asset trading and custody services.

Major Developments in the Virtual Asset Regulatory Framework

Hong Kong plans to introduce a bill to the Legislative Council within this year, marking a decisive step in establishing clear rules. This legislation will cover all activities related to virtual asset advisory and asset management, providing a solid legal foundation for market participants. This regulatory effort addresses the need to oversee a rapidly growing sector while maintaining financial stability.

Effective Implementation of the Stablecoin Ordinance

Hong Kong’s Stablecoin Ordinance has now come into effect since the second half of 2025, concretizing efforts to regulate stable digital currencies. The Hong Kong Monetary Authority is currently processing an increasing volume of related license applications, demonstrating private sector interest in operating under this new regulatory framework. This implementation represents a significant advancement in the supervision of stable digital assets.

Strategic Expansion of the International Gold Market

Alongside these virtual asset initiatives, Hong Kong is undertaking a major transformation of its gold sector. The goal is to increase gold reserves exceeding 2,000 tons within three years, positioning the region as a key regional hub for gold storage. This expansion aligns with Hong Kong’s broader strategy to strengthen its status as an international precious metals trading center.

Establishment of a Centralized Clearing Infrastructure

A governance body dedicated to the Central Gold Clearing System has been established, fully controlled by government authorities. Pilot operations of this clearing system are expected to begin this year, testing operational capabilities and settlement mechanisms. This modernized infrastructure will enhance the efficiency of international gold transactions.

Optimization of the Financial Framework and Settlement Cycles

Complementing these initiatives, the Financial Services and the Treasury Bureau is currently reviewing several tax relief measures aimed at attracting international financial institutions and optimizing Hong Kong as a global hub. Among these measures is the reduction of the stock settlement cycle from the current T+2 system to a faster T+1 cycle. This acceleration would boost the competitiveness of Hong Kong’s financial market and facilitate international capital flows.