Cryptocurrency in China: why Hong Kong is turning digital assets into a managed industry

Crypto-asset transactions are still restricted on the mainland, so the main intrigue for the market has shifted to Hong Kong. This week, the city's authorities published the results of public consultations on future regulations for companies working with virtual assets and outlined a goal of bringing bills to the legislature in 2026. The focus is on standards that reduce risks for customers and leave room for the development of new financial services.

The concept is built around licensing the providers that enable tokenized transactions. The approach is called “double-key”: anti-money laundering and anti-terrorist financing requirements will be combined with standards similar to those for classical intermediaries on the securities market. Participants are expected to have a transparent ownership structure, control of conflicts of interest, risk management procedures and readiness for supervision at the level of reporting and internal regulations. For companies, this means more compliance, but a clear route to work.

A separate topic is custody. Regulators want to prescribe requirements for custodians: segregation of client assets, key access rules, independent audit procedures, cyber defense standards and incident plans. The materials explicitly mention scenarios that could hit the industry's reputation, from technical failures and operator error to infrastructure attacks and sudden spikes in withdrawals. The goal here is not to make life more complicated, but to make digital asset custody look as familiar to big capital as bank custody.

As a result, Hong Kong is trying to put together a showcase of a “regulated crypto economy” alongside familiar financial products. For mainland China, this is a convenient design: strict capital controls remain in place, and the neighboring jurisdiction can practice models, attract specialists and investors without transferring all the risks inside the main system.

Companies that plan to operate in the region will have to consider not only marketing, but also the cost of processes: staff training, regular inspections, backup circuits, and contracts with safety contractors. It is on this field that competition for trust will begin in 2026 - whoever has faster and cleaner infrastructure will get long contracts.