Guojin Securities: A Comprehensive Understanding of the Hong Kong Virtual Asset Regulatory Framework and Related Licenses

Authors: Yi Yongjian, Chai Mengting, Guojin Securities

1. Policies Related to Virtual Assets in Hong Kong

From the "Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance" to the "Stablecoin Ordinance", Hong Kong's regulatory framework for virtual assets is continuously improving. In October 2022, the SFC issued a declaration on the "Policy for the Development of Virtual Assets in Hong Kong", stating that "we want virtual asset innovation to thrive in Hong Kong in a sustainable manner." In June 2023, the "Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance" came into effect, emphasizing that Virtual Asset Trading Platforms (VATPs) must operate with a license. In March 2024, the Hong Kong Monetary Authority launched a sandbox for stablecoin issuers, aiming to communicate regulatory expectations to institutions intending to issue fiat stablecoins in Hong Kong and gather feedback from participants on the proposed regulatory requirements. In April 2024, Asia's first virtual asset spot ETFs were launched in Hong Kong. In February 2025, the SFC released the "ASPIRe" roadmap, planning 12 key measures around five core pillars: connectivity, security, products, infrastructure, and relationships, to build a safer, more innovative, and open virtual asset market. In June 2025, the SAR government published the "Hong Kong Digital Asset Development Policy Declaration 2.0", proposing the "LEAP" framework and reaffirming its commitment to making Hong Kong a global innovation center in the digital asset space. In May 2025, the Hong Kong Legislative Council passed the "Stablecoin Ordinance Bill" and published it in the Gazette, with the "Stablecoin Ordinance" set to come into effect in August 2025.

2. Licenses Related to Virtual Asset Services in Hong Kong

In December 2022, the Legislative Council of the Hong Kong Special Administrative Region passed the "(Amendment) Bill on Anti-Money Laundering and Terrorist Financing System 2022", introducing a new licensing regime for "Virtual Asset Service Providers (VASP)", which stipulates that any business providing virtual asset services must apply for a license from the Hong Kong Securities and Futures Commission. Under the new regime, central virtual asset trading platforms operating in Hong Kong will be required to apply for a license from the Securities and Futures Commission under the Securities and Futures Ordinance (Chapter 571) and/or the Anti-Money Laundering Ordinance (i.e., a dual licensing regime). The introduction of the Anti-Money Laundering Ordinance marks the transition of Hong Kong's new virtual asset exchange licensing system from voluntary to statutory. Under this ordinance, virtual asset trading of non-securities tokens will also be regulated. This system officially came into effect on June 1, 2023, and is one of the core systems for Hong Kong to build a compliance framework for virtual assets.

The Securities and Futures Ordinance issued by the Hong Kong Securities and Futures Commission (SFC) specifies 13 types of regulated activities, among which Class 1, Class 4, Class 7, and Class 9 licenses can be combined with the VASP license, authorizing the approved entities to engage in related virtual asset businesses. Specifically, Class 1 license authorizes securities trading, Class 4 license authorizes the provision of advice on securities, Class 7 license authorizes the provision of automated trading services, and Class 9 license authorizes asset management.

2.1 Virtual Asset Trading Services: VASP+1 License / Introduction to Agent Model

The Hong Kong Securities and Futures Commission stipulates that intermediaries can only cooperate with virtual asset trading platforms that are licensed by the Commission to provide virtual asset trading services. There are two specific ways to do this: first, by opening a comprehensive account on the relevant platform and arranging to provide virtual asset trading services through the comprehensive account; second, by introducing clients to the relevant platform, acting as an introducing agent for the virtual asset trading platform.

(1) The comprehensive account arrangement provides virtual asset trading services with a VASP license (Virtual Asset Service Provider license) combined with the Hong Kong Securities and Futures Commission Type 1 license (Securities Trading License), allowing institutions to simultaneously engage in trading activities for both security tokens and non-security tokens. The VASP license alone allows for the trading of non-security virtual assets (such as regular cryptocurrencies); by adding the Type 1 license, it can cover security attribute tokens, thereby expanding the categories of virtual asset trading.

(2) As an introducing agent for the virtual asset trading platform, under the introducing agent model, the intermediary's clients will establish business relationships with the SEC-licensed platform and conduct transactions directly through that platform. Trading accounts on the platform will be opened in the name of the relevant clients. The intermediary shall ensure that a written agreement is entered into with the SEC-licensed platform to specify the responsibilities of both the intermediary and the SEC-licensed platform under the introducing arrangement.

As of July 16, 2025, a total of 43 institutions have been approved to provide virtual asset trading services through integrated account arrangements, and 19 institutions have been approved to provide virtual asset trading services through integrated account arrangements. Among them, Guotai Junan Securities ( Hong Kong ) Limited, Yuan Universe Securities Limited, Dasheng Securities Limited, CMB International Securities Limited, Nanhua Securities Investment Limited, and Victory Securities Limited have been approved to operate two types of virtual asset trading services.

2.2 Operating a virtual asset trading platform: VASP + License No. 1 + License No. 7

The VATP license (Virtual Asset Trading Platform Licence) is a specialized regulatory license established by the Hong Kong Securities and Futures Commission (SFC) for centralized virtual asset trading platforms, which is a core subclass of the VASP (Virtual Asset Service Provider) license system. The platform operators are required to obtain a Type 1 (Securities Trading) + Type 7 (Providing Automated Trading Services) license. As of July 16, 2025, 11 institutions have been granted the VATP license, with another 9 institutions in the application process. Among the applying companies, NewBX Limited, Foris DAX HK Limited, Whalefin Markets Limited, and Flying Hippo Technologies Limited are the applicants that have been granted licenses.

2.3 Provide opinions on virtual assets: VASP +4 badge

The Hong Kong Securities and Futures Commission and the Monetary Authority currently propose to only allow intermediaries who are licensed or registered for regulated activities under Type 1 (securities trading) or Type 4 (advising on securities) to provide advice on virtual assets. As of July 16, 2025, a total of 37 institutions have been approved.

2.4 Managing Virtual Asset Investment Portfolio: VASP + No. 9 License

The Hong Kong Securities and Futures Commission and the Monetary Authority currently propose to only allow intermediaries that meet the minimum exemption requirements and are licensed or registered for regulated activities under Type 9 (Asset Management) to provide asset management services for virtual assets. The minimum exemption requirement is that the stated investment objective of the portfolio is to invest in virtual assets, or intends to invest 10% or more of the total asset value in virtual assets. As of July 16, 2025, a total of 42 institutions have been approved.

III. Policies Related to Stablecoins in Hong Kong

3.1 Hong Kong "Stablecoin Regulations"

The "Stablecoin Regulation" is about to be implemented, and the regulation of the stablecoin market in Hong Kong is becoming increasingly完善. On May 21, 2025, the Hong Kong Legislative Council officially passed the "Stablecoin Regulation Draft." After the implementation of the "Stablecoin Regulation," anyone who issues fiat stablecoins in Hong Kong during business activities or issues fiat stablecoins claiming to be pegged to the value of the Hong Kong dollar in or outside of Hong Kong must apply for a license from the Financial Management Officer. The regulation will officially take effect on August 1, 2025.

The "Stablecoin Regulation" is the product of a complete legislative process that has been gradually improved over three and a half years. In January 2022, the HKMA released the "Discussion Paper on Crypto Assets and Stablecoins," which outlined the regulatory framework for crypto assets, particularly stablecoins used for payment purposes; in December 2023, a consultation document was released, clarifying the regulatory direction for stablecoin issuers; in March 2024, a regulatory sandbox for stablecoins was launched to test practical application scenarios; in July 2024, the consultation conclusions were published, determining the legislative direction; on May 21, 2025, the Legislative Council passed the third reading, marking the implementation phase of Hong Kong's stablecoin regulation.

The "Stablecoin Regulations" consists of 11 chapters and 175 articles, providing detailed explanations on the definition of stablecoins, licensing system, obligations of license holders, powers of the Monetary Authority, criminal offenses and penalties, supervisory mechanisms, and other related content. (See Chart 11 for details)

3.2 Stablecoin Sandbox Institutions

Hong Kong launched a stablecoin issuer sandbox last year to promote the implementation of the stablecoin system. In the fintech field, the sandbox mainly refers to the regulatory authorities allowing financial institutions to test new services and products in a controlled and limited environment before launch, collecting data and user feedback to accelerate the rollout of related products and services, while ensuring compliance with regulatory requirements. On March 12, 2024, the Hong Kong Monetary Authority launched the stablecoin issuer sandbox, aimed at conveying regulatory expectations to institutions intending to issue fiat stablecoins in Hong Kong and gathering participants' opinions on the proposed regulatory requirements.

The stablecoin sandbox can not only provide guidance for regulation but also help issuers test the feasibility of their business. Before the implementation of the regulatory system for stablecoin issuers, the Monetary Authority can use the sandbox to convey regulatory expectations and provide guidance to institutions planning to issue fiat stablecoins in Hong Kong, as well as collect participants' opinions on the proposed regulatory requirements to ensure that the system's design meets regulatory objectives. For sandbox participants, they can test the feasibility of their expected business models and communicate directly with the Monetary Authority to understand how to comply with future regulatory requirements.

According to the public information from the Hong Kong Monetary Authority, there are currently three groups of stablecoin sandbox institutions, namely JD Coin Chain Technology (Hong Kong) Limited, Yuan Coin Innovation Technology Limited, and Standard Chartered Bank (Hong Kong) + Anni Group + Hong Kong Telecommunications Joint Venture Company. Their entry into the sandbox is on July 18, 2024.

4. Related Stock Sorting

1. Relevant parties for stablecoin issuance application: Yuan Coin Technology related (ZhongAn Online, Baishida Holdings, etc.), JD Group-SW, Standard Chartered Group, Ant Group (Yaocai Securities Finance, etc.), domestic state-owned enterprises, and other applicants;

2. Hong Kong Virtual Asset Exchanges (holding VATP licenses): OSL Group, HKE Holdings, Lianlian Digital, Futu Holdings, Tiger Brokers, Puxing Energy (holding shares in Hashkey);

3. Stablecoin downstream application scenarios: Yika, Lianlian Digital, Jinyong Investment (in cooperation with AnchorX);

4. RWA related: Fubo Group, Lianyi Technology-W, Delin Holdings, Yisou Technology, Yunfeng Finance;

5. Upgrade the No. 1 license to access virtual asset trading: Guotai Junan International, Victory Securities, China Merchants Bank, First Shanghai, Fosun International, Jieli Trading Treasure, Futu Holdings, Tiger Brokers;

6. Holding virtual assets: Boya Interactive, Huaxing Capital Holdings, Mi Strategy, Hengyue Holdings, Blueport Interactive;

7. Traditional cryptocurrency assets: New Huo Technology Holdings, OK Blockchain, Xiong An Technology.