Hong Kong is looking to finalize its crypto laws soon. Amid rules being proposed to regulate the digital assets industry, the Hong Kong Insurance Authority has reportedly expressed a desire to get exposure to crypto.
The insurance regulator of Hong Kong has proposed to wire insurance capital into cryptocurrencies and other assets like infrastructure. The process will be highly regulated and be overseen by the Insurance Authority itself.
The insurance authority has proposed to levy a 100 percent risk charge on crypto assets. The Bloomberg report outlined that risk charges on stablecoins will be based on the fiat currency that these assets are pegged to. More details on the proposed guidelines remains undisclosed for now.
The proposal was laid out earlier this month, Bloomberg reported on Monday. If approved, the step would be aimed at redirecting funds into sectors that the government there seems to be prioritizing for now.
For now, the regulator has started re-assessing an approach around risk-based capital (RBC) regime – aiming to widen the economic development linked to the insurance sector. The regime was introduced on 1 July, 2024. Through this, the insurance authority plans to have insurance issuers be more sensitive to each insurer’s risk profile while providing closer alignment with international standards.
“Its implementation marks a significant milestone for the insurance industry, enhancing protection for policy holders and solidifying Hong Kong’s role as a global insurance hub,” the Hong Kong government had said in an official post.
For now, these rules are in early phases of formulation and discussion. More clarity on them is likely by mid-2026. The Insurance Authority will be opening the proposed rules for consultations and feedback between February and April next year.
Between August and October this year, Hong Kong made major strides in its crypto regulations. In August, Hong Kong’s Securities and Futures Commission (SFC) issued a circular to all licensed virtual asset trading platforms (VATPs) laying rules to protect client-held digital assets and to promote a secure, credible crypto landscape in the city.
Later in October, the Hong Kong Monetary Authority passed a landmark bill for fiat-referenced stablecoin issuers – requiring licenses, reserve holdings, redemption rules, and risk controls to be in place to be allowed to operate in the region.