- HKMA draft lowers capital rules for banks holding crypto with strong issuer safeguards.
- The new CRP-1 module aligns Basel III with Hong Kong’s digital asset regulations by 2026.
- HKMA framework focuses on permissionless crypto, separate from tokenized securities or stablecoins.
Hong Kong’s banking regulator has released draft rules that could lower capital requirements for banks holding digital assets on permissionless blockchains. The Hong Kong Monetary Authority (HKMA) introduced the proposals through a consultation paper, targeting implementation in early 2026. The guidance forms part of a new supervisory policy manual, module CRP-1, which aligns with Basel Committee standards.
Draft Rules Target Permissionless Assets
The HKMA’s draft framework allows reduced capital obligations for permissionless blockchain assets, but only if issuers demonstrate strong risk management and mitigation practices. These measures are a move from existing Basel III rules, which assign a 1250% risk weight to most crypto holdings, effectively requiring banks to hold capital equal to the entire value of such assets.
This change means that instead of applying one blanket restriction, Hong Kong intends to recognize distinctions between asset types. The framework classifies crypto differently based on issuer practices, allowing lower requirements when issuers demonstrate strong governance and risk controls. However, the draft still maintains heavier capital charges for high-risk or unbacked tokens like Bitcoin and Ethereum.
Push to Build Digital Asset Infrastructure
The draft consultation paper has been circulated among Hong Kong banks for feedback. The HKMA approach follows recent steps to expand regulatory outlook for crypto, including licensing rules for exchanges and stablecoin issuers.
In August, the Securities and Futures Commission released updated guidance requiring licensed trading platforms to strengthen custody practices for client funds. This well-defined rollout differs from the regulatory path in mainland China, which enforces strict bans on crypto trading and mining.
Hong Kong, meanwhile, has positioned itself as a regional testing ground for integrating digital assets within established financial systems. By improving Basel rules in its own marketplace, the HKMA aims to enhance transparency and bank participation in digital markets.
Related: HKMA Unveils Stablecoin Framework to Launch in August 2025
Regional and Institutional Context
The HKMA said the new rules will start in early 2026, aligning with the global Basel III timeline. The process ensures banks can adapt before full enforcement begins. The guidance specifically targets permissionless blockchain assets, setting them apart from tokenized securities or stablecoins already addressed under separate licensing regimes.
Animoca co-founder Yat Siu described Hong Kong’s stablecoin framework as one of Asia’s most advanced, citing the rarity of central bank licensing in the region. However, Hong Kong University Bo Tang pointed to strict KYC obligations as a hurdle, especially for cross-border use cases.
These perspectives show the difficulties of balancing oversight with accessibility. Other regions continue to take varied approaches. The United States has restricted unlicensed stablecoins through the GENIUS Act, while the EU’s MiCAR regime enforces strict reserve rules.
Singapore applies monthly checks on fully backed stablecoins, and Switzerland maintains a more open framework. Hong Kong’s path stands out as regulators refine distinct requirements for each type of crypto asset.
Hong Kong’s draft guidance introduces a lower capital framework for permissionless blockchain assets with proven safeguards, differing from strict Basel norms. The HKMA’s CRP-1 module aligns with international standards but adapts them to local banking realities, with implementation scheduled for 2026. Combined with existing licensing and custody rules, the plan strengthens Hong Kong’s growing digital asset framework while inviting institutional input before rollout.
