Hong Kong Opens Global Cryptocurrency Opportunities to Compete with Singapore and the United States

Hong Kong plans to relax rules for

asset trading platforms, enabling licensed firms to connect their global order books with international partners to boost liquidity and reinforce its status as a digital asset center, as reported by . This initiative, part of the Securities and Futures Commission's (SFC) broader efforts to draw both institutional and retail investors, allows locally approved virtual asset trading platforms (VATPs) to link with global markets through related overseas entities. The regulatory update supports Hong Kong's goal to compete with Singapore and the U.S. in advancing fintech and blockchain innovation.

This development comes as Hong Kong's financial sector experiences heightened activity, such as Seres Group—a Chinese EV maker allied with Huawei—raising $1.8 billion, according to

. The company set its Hong Kong IPO price at the top of its range, offering 108.6 million shares at HK$131.50 each. This listing, which increases Seres' capital for international growth, highlights Hong Kong's function as a bridge for mainland Chinese companies seeking global reach, as noted by .

Hong Kong's approach to digital asset regulation has been evolving under careful supervision. Recently, the city turned down applications from at least five listed firms aiming to become digital asset treasury (DAT) entities, citing legal gaps and concerns over investor protection, according to

. SFC Chairman Wong Tin-yau cautioned that DAT premiums—where market values and share prices surpass the worth of the underlying cryptocurrencies—could disappear quickly without robust regulations, as reported by . The regulator stressed the importance of investor education, pointing out that most local investors are unfamiliar with DAT models.

Even with these limitations, Hong Kong's financial landscape remains vibrant. For example, Tether's

stablecoin achieved a $174 billion market capitalization in 2025, fueled by strong demand for dollar-linked assets, according to . At the same time, Zcash's market value exceeded $7 billion, indicating renewed enthusiasm for privacy-oriented cryptocurrencies, as noted by . These developments underscore Hong Kong's expanding role in digital finance, as regulators strive to balance progress with prudent oversight.

The loosening of VATP regulations aligns with Hong Kong's broader strategy to attract cryptocurrency businesses. Earlier this year, the city launched a licensing system for stablecoins, allowing authorized firms to issue tokens backed by fiat currencies. Nonetheless, some economists have argued that the regulatory pace remains slow compared to the U.S., where stablecoin use is growing rapidly.