Hong Kong Unlocks Global Crypto Doors to Challenge Singapore and U.S.

Hong Kong is set to ease restrictions on virtual asset trading platforms, allowing licensed operators to share global order books with overseas counterparts in a bid to enhance liquidity and solidify its position as a digital asset hub, according to a Reuters report. The move, part of the Securities and Futures Commission's (SFC) broader strategy to attract institutional investors and retail traders, permits locally licensed virtual asset trading platforms (VATPs) to integrate with global markets through affiliated overseas platforms. This regulatory shift aligns with Hong Kong's ambition to rival Singapore and the U.S. in fostering innovation in fintech and blockchain technology.

The update comes amid a surge in Hong Kong's financial market activity, including a $1.8 billion fundraising by Seres Group, a Chinese electric vehicle (EV) manufacturer partnered with Huawei, reported by CNEVPost. The company priced its Hong Kong IPO at the upper end of its range, selling 108.6 million shares at HK$131.50 each. The listing, which expands Seres' capital base to support global expansion, underscores Hong Kong's role as a gateway for mainland Chinese firms seeking international exposure, according to The Edge Malaysia.

Hong Kong's regulatory environment for digital assets has been evolving amid cautious oversight. The city recently rejected applications from at least five listed companies seeking to convert into digital asset treasury (DAT) entities, citing gaps in legislation and investor protection concerns, according to CoinEdition. SFC Chairman Wong Tin-yau warned that DAT premiums—where stock prices and market caps often exceed the value of held cryptocurrencies—could vanish rapidly without clear regulatory frameworks, as reported by Cryptopolitan. The regulator emphasized the need for investor education, noting that most local investors lack understanding of DAT structures.

Despite these constraints, Hong Kong's market remains dynamic. For instance, Tether's USDT stablecoin reached a $174 billion market cap in 2025, driven by soaring demand for dollar-pegged assets, according to FinanceFeeds. Meanwhile, Zcash's market cap surged past $7 billion, reflecting renewed interest in privacy-focused cryptocurrencies, according to Cryptopolitan. These trends highlight the city's growing influence in digital finance, even as regulators balance innovation with risk management.

The easing of VATP rules complements Hong Kong's push to attract crypto firms. Earlier this year, the city introduced a licensing framework for stablecoins, allowing licensed entities to issue tokens pegged to fiat currencies. However, economists have criticized the pace of regulation as overly cautious compared to the U.S., where stablecoin adoption is accelerating.