Hong Kong’s securities regulator has taken a major step to broaden the city’s crypto market, unveiling rules that allow licensed crypto firms to offer margin financing and enable trading in leveraged perpetual contracts — moves designed to deepen liquidity and sharpen Hong Kong’s position as a global virtual-asset hub. What’s changing - The Securities and Futures Commission (SFC) released a Pillar P framework under its ASPIRe roadmap permitting licensed corporations that provide virtual-asset dealing services (VA brokers) to extend credit to margin clients. Credit will only be available to clients with strong credit profiles and adequate securities collateral. - Only Bitcoin (BTC) and Ether (ETH) are eligible as virtual-asset collateral under the new guidance. - The SFC has also published a high-level framework allowing licensed virtual-asset trading platforms to offer perpetual contracts (Perps) — but only to professional investors. Why the regulator is moving now According to the SFC, these changes aim to expand product choice, deepen market liquidity, and broaden investors’ risk-management tools while positioning Hong Kong as a leading digital-asset center. The regulator says responsible, regulated margin financing can boost participation and liquidity in a “risk-controlled environment.” Risk controls and operator responsibilities The SFC cautions that perpetual contracts carry risks different from traditional futures and spot trading. As a result, platform operators will need robust governance and transparent processes covering valuation, margining, collateralization and liquidation. The new frameworks emphasize strong management measures to contain those risks and align crypto offerings with traditional market standards. Comments from the SFC Speaking at Consensus Hong Kong 2026, Eric Yip, the SFC’s Executive Director of Intermediaries, described the ASPIRe roadmap as ushering Hong Kong’s crypto development into a “defining stage.” He stressed this year’s regulatory focus on liquidity — cultivating market depth, improving price discovery and building investor confidence through expanded but responsible product access. Yip noted that crypto margin financing will be anchored to the existing securities margin-financing framework to clarify the use of crypto as collateral and “enable responsible leverage that supports liquidity without undermining financial stability.” He also described the Perps framework as principles-based and intended for professional investors. Innovation channel: Digital Asset Accelerator Yip highlighted a forthcoming Digital Asset Accelerator under Pillar Re — a structured conduit for engagement between regulators and industry innovators aimed at bridging regulatory clarity and product innovation. Bottom line Hong Kong is deliberately expanding its crypto product suite while insisting on strong regulatory guardrails. By greenlighting BTC/ETH-backed margin financing and professional-only perpetuals within a controlled framework, the SFC is betting that liquidity and market sophistication can be cultivated — provided governance, transparency and risk controls remain front and center. Read more AI-generated news on: undefined/news

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