The Hong Kong Securities and Futures Commission (SFC) has announced plans to permit professional investors to trade virtual asset derivatives, marking a major milestone in the city’s efforts to expand its digital asset ecosystem.
The initiative aims to diversify the range of available investment products while ensuring risk is carefully managed.
Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury, emphasized that the move aligns with Hong Kong’s strategic goal to strengthen its position as a global hub for digital finance.
According to the SFC, the introduction of regulated derivatives products will facilitate risk transfer, enhance liquidity in spot markets.
Also, being able to empower institutional investors to implement advanced strategies like hedging and leveraging.
Surging Market Demand and Regulatory Evolution Drive Policy Shift
The decision to open the crypto derivatives market comes in response to overwhelming market demand and the broader trend of integrating virtual assets into mainstream finance.
In the first quarter of 2025, crypto derivatives trading volumes reached $21 trillion, vastly outpacing the $4.6 trillion spot market, signaling a strong appetite for such financial instruments.
The policy shift follows other significant developments in Hong Kong’s virtual asset regulatory landscape, such as the passage of the Stablecoin Licensing Bill and the launch of staking services.
These steps are seen as part of a broader push to build a structured and compliant framework that accommodates the rapid evolution of virtual assets.
Also Read: Hong Kong’s Stablecoin Ordinance Officially Gazetted, Set to Take Effect in 2025
Strategic Steps to Build a Comprehensive and Compliant Crypto Ecosystem
To further support its regulatory ambitions, the SFC is gradually rolling out measures that balance innovation with investor protection.
Earlier this year, the commission authorized staking services for virtual assets under strict conditions and allowed two virtual asset spot exchange-traded funds (ETFs) to revise their offerings to include staking.
These developments, alongside the upcoming second policy statement on virtual assets, reflect Hong Kong’s commitment to combining traditional financial safeguards with emerging technologies.
The policy aims to enhance the flexibility and security of economic activities, encourage innovation, and attract both domestic and global fintech players to participate in the local virtual asset market.
Also Read: Hong Kong and Six Police Units Uncovers Criminal Network Laundering $15 Million Using Cryptocurrency
Reinforcing Hong Kong’s Role as Asia’s Digital Finance Leader
Since issuing its first virtual asset policy statement in 2022, Hong Kong has steadily advanced its digital asset infrastructure.
Launching Asia’s first virtual asset futures ETFs in 2022, spot ETFs in 2024, and an inverse futures product by mid-2024.
These achievements have positioned Hong Kong as a leading ETF market in Asia. To attract further global investment.
The government also plans to extend tax concessions to virtual assets, recognizing them as eligible transactions for preferential tax regimes targeting funds and single-family offices.
With over 1,100 fintech companies, including digital banks, virtual insurers, and trading platforms, already operating in the city.
Hong Kong is poised to solidify its reputation as a global digital finance powerhouse in the face of an expanding $3 trillion virtual asset market.
Also Read: Hong Kong’s OSL Group Acquires 90% Of Indonesian Crypto Exchange For $15M To Drive Expansion