The global race to become a leading virtual asset hub is heating up—and Hong Kong is making bold moves to claim its position. With the Stablecoin Ordinance set to take effect on August 1, 2025, the city is launching the world’s first comprehensive regulatory framework for fiat-backed stablecoins. This landmark legislation marks a turning point for the region's digital asset ecosystem, triggering market excitement and investor interest alike.
One of the clearest signs of this momentum? Cathay Fubon International (01788.HK) saw its stock surge to a 10-year high after becoming the first mainland-affiliated securities firm in Hong Kong authorized to offer full-scale virtual asset trading services. But what lies behind this rally—and what opportunities and risks await investors?
Understanding Virtual Assets in Hong Kong
Before diving into investment strategies, it's essential to understand what constitutes a virtual asset under Hong Kong law.
Virtual assets are digital representations of value—such as cryptocurrencies (e.g., Bitcoin, Ethereum), stablecoins, or tokenized securities—that typically operate on blockchain technology. Under regulations enforced by the Securities and Futures Commission (SFC), investors can only trade these assets through licensed platforms.
As of June 30, 2025, there are 11 licensed virtual asset exchanges in Hong Kong, including major players like HashKey Exchange and OSL. These platforms allow users to deposit fiat currencies like HKD or USD and trade major digital assets such as BTC and ETH.
HashKey Exchange has emerged as a market leader, ranking #17 globally on CoinGecko. It was also the first licensed exchange to open services to retail investors in August 2023, marking the beginning of regulated crypto access for everyday users.
👉 Discover how regulated crypto trading platforms are shaping Hong Kong’s financial future.
How Investors Can Access Crypto—Safely and Legally
Beyond direct exchange accounts, investors now have alternative pathways via traditional financial institutions.
Over 42 firms—including 39 brokers, one bank, one asset manager, and one internet company—have upgraded their Type 1 (Securities Dealing) licenses to include virtual asset services. These institutions connect to licensed exchanges through omnibus accounts, allowing them to offer crypto trading via familiar brokerage apps.
This integration means investors can open a single securities account and apply for a Virtual Asset (VA) trading sub-account, enabling seamless access to spot crypto, ETFs, and even private funds—all within one platform.
While Cathay Fubon International has secured its license, its virtual asset services aren’t yet live on the Junhong Global Connect app. A customer service representative confirmed: “The specific list of tradable assets will be announced after August.”
However, other brokers are already ahead. Victory Securities, a local pioneer, launched VictoryX—Hong Kong’s first all-in-one stock-and-crypto app—in April 2024. It allows true “crypto-in, crypto-out” functionality without requiring users to register with an exchange. From April 2024 to March 2025, Victory recorded over HK$10 billion in crypto trading volume, topping the industry.
Other major names like Futu Holdings (partnered with HashKey) and Interactive Brokers (with OSL) have also rolled out crypto services since 2023.
Diversifying Exposure: The Rise of Crypto Financial Products
Hong Kong’s virtual asset market is no longer limited to spot trading. A growing suite of regulated financial products offers diversified exposure:
1. Spot Cryptocurrency Trading
Direct ownership of Bitcoin (BTC), Ethereum (ETH), and stablecoins remains foundational. Accessible via exchanges or broker-integrated platforms.
2. Crypto ETFs
In April 2024, Hong Kong debuted Asia’s first batch of spot Bitcoin and Ethereum ETFs, issued by firms like CSOP, Harvest, and Bosera. With entry points starting around HK$800 per share, these ETFs lowered barriers for retail investors.
Additionally, futures-based ETFs—offered by Southern Asset Management and Samsung Asset Management—track CME-traded Bitcoin and Ethereum futures contracts.
Currently, the market includes 6 spot ETFs and 3 futures ETFs, managing over HK$3.8 billion in assets as of May 2025.
3. Virtual Asset Investment Portfolios
For professional investors, 41 asset managers have upgraded to Type 9 (Asset Management) licenses, allowing them to manage portfolios with more than 10% exposure to digital assets.
Despite this progress, product variety remains limited—and crucially, Mainland Chinese residents are barred from participating.
Due to mainland regulations, all licensed Hong Kong institutions—including Cathay Fubon—prohibit Chinese nationals from accessing virtual asset services. This separation ensures compliance but limits market reach.
The Stablecoin Catalyst: Fueling Market Growth
While Bitcoin remains the flagship digital asset, the real engine behind recent market momentum may be stablecoins.
On May 21, 2025, Hong Kong’s Legislative Council passed the Stablecoin Bill, which became law on May 30 after being gazetted. Effective August 1, it establishes strict requirements:
- Minimum 80% cash or cash-equivalent reserves
- Regular audits and public disclosures
- Licensing by the Hong Kong Monetary Authority (HKMA)
This positions Hong Kong as the first jurisdiction with a full regulatory regime for fiat-referenced stablecoins—preceding even the U.S., where the GENIUS Act is expected to pass by late August 2025.
Globally, stablecoin issuance has exploded—surpassing $235 billion** by mid-2025. **Tether (USDT)** dominates with over **$150 billion in market cap, representing nearly two-thirds of the market. Its parent company reported over $13 billion in net profit in 2024, outpacing major Wall Street banks.
Circle, issuer of USDC, also made headlines with a successful U.S. IPO and a fivefold valuation surge—earning the nickname “the first stablecoin stock.”
👉 Learn how stablecoins are transforming global finance and investment strategies.
Investment Strategies Beyond Volatility
Unlike volatile assets like Bitcoin, stablecoins offer stability—not capital appreciation. So how do investors generate returns?
Two common approaches:
- Yield generation: Deposit USDT or USDC into decentralized lending protocols for interest.
- Arbitrage trading: Exploit price differences across exchanges or DeFi platforms.
However, risks remain—especially issuer risk. The collapse of Binance’s BUSD following regulatory action against Paxos in early 2023 serves as a cautionary tale.
Experts advise sticking to regulated issuers and closely monitoring reserve transparency.
Regulatory Roadmap: Building a Trusted Ecosystem
Hong Kong isn’t stopping at stablecoins. In February 2025, the SFC unveiled its A-S-P-I-Re roadmap, outlining five pillars:
- Access
- Safeguards
- Product innovation
- Infrastructure
- Relationship building
This strategic vision supports innovations like tokenized securities and compliant DeFi applications.
Further reinforcing this direction, the government released the Hong Kong Digital Assets Policy Declaration 2.0 in June 2025. It designates the SFC as the primary regulator for digital asset service providers while assigning the HKMA oversight of banks’ digital activities.
According to research firm Zhongyan Pu Hua, Hong Kong’s digital asset sector reached HK$112 billion in 2024**, with projections exceeding **HK$150 billion in 2025—a compound annual growth rate above 35%.
Yet challenges persist:
- Global regulatory divergence
- Cybersecurity threats
- Cross-border compliance complexity
US regulators demand full U.S. Treasury backing for stablecoins and ban algorithmic models—rules distinct from Hong Kong’s approach.
Frequently Asked Questions (FAQ)
Q: Can mainland Chinese residents invest in Hong Kong crypto products?
A: No. Due to PRC regulations, all licensed Hong Kong institutions prohibit mainland residents from accessing virtual asset services—including ETFs and trading accounts.
Q: When does Hong Kong’s Stablecoin Ordinance take effect?
A: The law takes effect on August 1, 2025. The HKMA will begin accepting license applications immediately thereafter.
Q: Are crypto ETFs safe for retail investors?
A: Licensed ETFs offer regulated exposure with lower entry costs. However, they still carry market risk and should align with individual risk tolerance.
Q: What is an omnibus account in crypto trading?
A: It’s a pooled account held by a broker at a licensed exchange, allowing clients to trade crypto indirectly through their brokerage platform.
Q: Is Bitcoin legal tender in Hong Kong?
A: No. While Bitcoin is recognized as a virtual asset, it is not legal tender. Transactions must comply with anti-money laundering rules.
Q: How do I start trading crypto in Hong Kong?
A: Open an account with a licensed broker or exchange that offers VA services. Verify your identity and fund your account via bank transfer.
👉 Start your journey into secure, regulated crypto trading today.
Final Thoughts: Opportunity Meets Caution
Hong Kong’s push to become a global virtual asset leader is gaining real traction. With robust regulation, innovative financial products, and growing institutional participation, the foundation is being laid for long-term growth.
But investors must remain vigilant. Regulatory landscapes evolve rapidly, issuer risks exist—even in stablecoins—and market volatility can return without warning.
By focusing on licensed platforms, understanding product mechanics, and staying informed about policy changes, investors can navigate this dynamic space wisely—and potentially benefit from one of finance’s most transformative shifts in decades.