Hong Kong proposes easing capital rules for banks holding crypto: report
Quick Take
- The Hong Kong Monetary Authority has circulated a draft guidance to the banking sector, proposing softer capital requirements for banks holding certain crypto assets, Caixin reported.
- Under the proposed rules, crypto assets built on permissionless blockchain networks could potentially qualify for lower bank capital requirements if their issuers implement effective risk management measures.
Hong Kong's de facto central bank unveiled plans for more lenient capital requirements for banks holding certain cryptocurrency assets, signaling the region's drive to become a crypto hub, local media reported.
In a consultation paper released Monday, the Hong Kong Monetary Authority introduced a new supervisory policy manual module, CRP-1, which outlines how crypto assets should be classified under the Basel Committee on Banking Supervision's global capital standards, according to a Wednesday report from financial news outlet Caixin. These international rules are scheduled to take effect in Hong Kong in early 2026.
The draft guidance — circulated to the local banking sector — details the HKMA's approach to implementing the Basel standards within Hong Kong's regulatory framework. The focus of the draft centers on the treatment of crypto assets that run on permissionless blockchains.
Under the proposed rules, crypto assets built on permissionless blockchain networks could potentially qualify for lower bank capital requirements if their issuers implement effective risk management and mitigation measures.
Hong Kong has embraced the crypto industry with licensing frameworks in place for crypto exchanges and stablecoin issuers, while China continues to ban crypto trading and mining on the mainland.
In August, Hong Kong's Securities and Futures Commission issued new guidance requiring licensed crypto trading platforms to strengthen custody practices for client assets.
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