Hong Kong Regulates Virtual Asset Margin Financing and Perpetual Trading

TLDR

• Hong Kong’s Securities and Futures Commission has approved virtual asset margin financing for licensed brokers.
• Only Bitcoin and Ether are eligible as collateral for the margin financing scheme.
• The new guidelines also introduce a framework for leveraged perpetual contracts for professional investors.
• Licensed crypto platforms can use market makers with strict conflict-of-interest and risk management controls.
• The SFC aims to enhance liquidity and strengthen investor confidence in Hong Kong’s crypto market.
• Hong Kong is moving forward with broader crypto regulations, including stablecoin issuer licenses expected in March 2026.

Hong Kong’s Securities and Futures Commission (SFC) announced new guidelines for licensed brokers, allowing them to offer virtual asset margin financing. This policy also introduces a framework for licensed crypto trading platforms to provide leveraged perpetual contracts to professional investors. The changes are part of Hong Kong’s broader efforts to regulate and expand its crypto market.

Virtual Asset Margin Financing Approved

The SFC’s new guidelines enable licensed brokers to offer margin financing to their securities clients. However, these clients must provide sufficient collateral and possess strong credit profiles. Initially, only Bitcoin (BTC) and Ether (ETH) will be eligible as collateral for these loans. The move aims to introduce structured leverage into Hong Kong’s crypto market while ensuring that financial stability is maintained.

In a statement, Eric Yip, executive director of intermediaries at the SFC, emphasized the importance of maintaining “responsible leverage” in this sector. He explained that the initiative is anchored to the existing securities margin framework, which includes controls on collateral quality and governance. The regulator seeks to support liquidity in the crypto market without undermining financial stability.

Hong Kong to Regulate Perpetual Contracts for Professional Investors

In addition to margin financing, the SFC unveiled a framework for providing leveraged perpetual contracts. These contracts will only be available to professional investors, with strict safeguards in place. The regulator’s measures are designed to improve market depth and support price discovery within Hong Kong’s supervised crypto market.

The SFC outlined that affiliates of licensed platforms may act as market makers, subject to conflict-of-interest regulations. These market makers will also be required to adhere to strong internal risk management protocols. The SFC’s goal is to enhance fairness, transparency, and liquidity, ensuring a more stable market for professional investors.

These regulatory updates are part of Hong Kong’s broader strategy to develop a robust digital asset ecosystem. Earlier in 2026, the Hong Kong Monetary Authority (HKMA) revealed plans to issue the first stablecoin licenses. These licenses are expected to be granted in March, with initial approvals limited.

In closing, the SFC’s recent measures are a step toward ensuring that Hong Kong remains a key player in the global crypto market. By allowing virtual asset margin financing and regulating leveraged contracts, the region aims to foster innovation and strengthen investor confidence.

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