Hong Kong’s top financial regulator has taken a major step in its quest to become a leading global crypto hub by allowing local trading platforms to connect with international liquidity pools. The Securities and Futures Commission (SFC) issued two circulars on Monday aimed at significantly boosting liquidity and broadening the product selection available on licensed local crypto exchanges.
Crucially, the new rules permit SFC-licensed crypto exchanges in Hong Kong to share a global order book with their overseas trading platforms. This marks a notable shift from the region’s previous model, which required orders to be pre-funded and settled strictly within its borders, although local platforms intending to adopt this system must first secure prior written approval from the SFC.
SFC Chief Executive Officer Julia Leung underscored the benefits of this integration, stating in a Hong Kong Fintech Week speech synopsis that it will enable local investors to “tap global market liquidity efficiently with better price discovery and more competitive prices.”
In a separate but equally important change, the SFC’s second circular exempted certain tokens from a key regulatory hurdle. Specifically, tokens and stablecoins already licensed by the Hong Kong Monetary Authority (HKMA) are now exempt from the mandatory 12-month trading history requirement, which was previously necessary for offering them to professional investors.
These regulatory relaxations are part of Hong Kong’s ongoing effort to continuously evaluate and update its regulations, a necessity amid intensifying global competition, particularly after the election of pro-crypto U.S. President Donald Trump in January.
The city has already established comprehensive licensing frameworks for both crypto exchanges and stablecoin issuers as it embraces the digital asset industry.
Leung highlighted the fine balance required, noting that overly strict requirements risk driving liquidity and talent toward “lighter-touch jurisdictions,” while insufficient oversight could compromise market trust and stability. She concluded that the city’s upcoming initiatives are focused on “building a trusted, globally competitive and sustainable ecosystem.”
