Hong Kong: fintech & payments regulation

Who regulates

• Hong Kong Monetary Authority (HKMA)

  Primary supervisor for banking institutions, payment systems, and stored value facilities; co-regulator for virtual asset activities involving stablecoins and banking entities.

  ^[1][2][3][4]

• Securities and Futures Commission (SFC)

  Primary supervisor for virtual asset service providers (VASPs) and securities-related activities; co-regulator for virtual asset fund management and advisory services.

  ^[2][5][6][7]

Core laws & rules

• Banking Ordinance (1989 (as amended))

  Establishes the three-tier banking system (banks, restricted licence banks, deposit-taking companies) and regulates authorized institutions, including licensing, capital, and operational standards.

  ^[1][8][9]

• Securities and Futures Ordinance (1989 (as amended))

  Regulates securities and futures markets, including the licensing of corporations and institutions providing virtual asset dealing and advisory services.

  ^[2][6][7]

• Stablecoins Ordinance (2025)

  Provides the legal framework for the authorization and regulation of stablecoins, defining 'Relevant Stablecoins' and setting standards for issuers and service providers.

  ^[3][10]

Licensing & registration

• Virtual Asset Service Provider (VASP) License

  Required for corporations and institutions providing virtual asset dealing, advisory, or custody services. Strict custody arrangements and functional independence are mandated. Timeline: Active as of 2026

  ^[2][6]

• Banking License (Three-Tier System)

  Includes full banks, restricted licence banks, and deposit-taking companies. Applicants must meet minimum criteria regarding capital, controllers, and business plans. Timeline: Active

  ^[8][9][11]

• Digital Bank License

  A specific authorization for institutions delivering services primarily through electronic channels, requiring substantial operational substance and local physical presence. Timeline: Active as of 2024

  ^[12][13]

Restrictions & warnings

• Non-bank entities are prohibited from using banking names or descriptions without specific consent from the HKMA under Section 97(1) of the Banking Ordinance.

  ^[14]

• Authorized institutions must implement mandatory name matching for real-time fund transfers, with no minimum transaction threshold, to prevent payment scams.

  ^[15][16]

• Virtual asset brokers offering financing must adhere to strict credit risk assessments and a minimum 60% haircut on eligible collateral.

  ^[5][17]

Direction of travel

• The regulatory environment is evolving to support innovation through expanded sandboxes for Generative AI and IP financing, while maintaining strict oversight on digital transformation and consumer protection.

  ^[18][19][20]

• Regulators are focusing on the integration of virtual assets into traditional finance, with joint guidance on stablecoin activities and relaxed requirements for authorized institutions dealing with 'Relevant Stablecoins'.

  ^[3][10]

Sources

1. Increase in Licence Fees under the Banking Ordinance · 2026-07-10
2. Terms and conditions for licensed corporations or registered institutions managing portfolios investing in virtual assets · 2026-05-27
3. Guidance on Virtual Asset-Related Activities Involving Relevant Stablecoins · 2026-05-27
4. Launch of Digital Licensing Platform · 2026-05-11
5. SFC Guidance on VA Financing, Shared Order Books, and Client VA Withdrawals · 2026-05-27
6. Licensing and Registration Conditions for Virtual Asset Dealing and Advisory Services · 2026-05-27
7. Updated Guidance on Registration in Respect of Regulated Activities under the Securities and Futures Ordinance and Controls to Ensure Fitness and Properness of Staff · 2025-10-27
8. Guide to Authorization: Chapter 2 - The Authorization Regime · 2022-03-23
9. Guideline 1.2: Authorization - Three-tier Banking System · 1990-01-22
10. Relevant Stablecoin-related Activities · 2026-05-27
11. Guideline on Minimum Criteria for Authorization · 2026-02-27
12. Guide to Authorization - Chapter 9 - Authorization of Digital Banks · 2026-02-27
13. Guideline on Authorization of Digital Banks · 2024-10-25
14. Guide to Authorization-Chapter 7-Restrictions on Use of Banking Names and Descriptions · 2026-02-27
15. Refined Measures on Real-Time Fund Transfers Made by Customers · 2025-02-18
16. Measures to protect bank customers from authorized payment scams · 2024-12-20
17. Guidance on Offering of Financing for Virtual Asset Dealing, Shared Order Book, and Client Virtual Asset Withdrawals · 2026-05-27
18. Joint Circular on the Expansion of Generative Artificial Intelligence Sandbox · 2026-03-05
19. Joint Circular on the Expansion of Generative Artificial Intelligence Sandbox · 2026-03-05
20. Intellectual Property Financing Sandbox Operating Principles · 2025-12-22