June 4, 2025 — In a strategic move to strengthen its position as a global digital asset hub, Hong Kong is preparing to allow crypto derivatives trading for professional investors, according to a report by China Daily HK. The initiative, backed by the Securities and Futures Commission (SFC), is part of a broader plan to expand the city’s fintech ecosystem and diversify digital asset products.
What’s Changing?
The announcement was confirmed by Christopher Hui Ching-yu, Hong Kong’s Secretary for Financial Services and the Treasury. Hui emphasized that the city is taking a “risk-managed, secure, and transparent” approach to introducing crypto derivatives — investment contracts tied to the performance of cryptocurrencies like Bitcoin and Ethereum.
This move comes as the global crypto market grows rapidly, now valued at over $3 trillion, with annual trading volumes surpassing $70 trillion, according to SFC data.
A Steady March Toward Digital Finance Leadership
Hong Kong has been steadily enhancing its virtual asset offerings since its first policy statement on digital assets in October 2022. Since then, the city has:
- Approved staking services (HashKey was among the first in April 2025)
- Launched spot Bitcoin and Ethereum ETFs
- Rolled out inverse crypto futures products
- Introduced Asia’s first virtual asset futures ETFs
Now, by allowing crypto derivatives for institutional players, the city is expanding the tools available to hedge, speculate, and invest in the growing Web3 economy.
A Competitive Tax Edge
Hong Kong is also sweetening the deal for global players. Hui noted that digital assets will soon qualify for tax concessions under the city’s preferential regime, which currently benefits investment funds, family offices, and carried interest structures.
This tax reform is part of Hong Kong’s larger goal to attract international fintech firms and digital asset innovators. Government agencies like Invest Hong Kong and the Hong Kong Key Enterprises Office are actively offering support, including help with licensing, regulations, and incentives.
Fintech Ecosystem on the Rise
These initiatives are paying off. Hong Kong now boasts over 1,100 fintech companies, including:
- 8 licensed digital banks
- 4 virtual insurers
- 10 licensed crypto trading platforms
The city is also gearing up to release its second major policy statement on virtual assets later this year, which will further integrate Web3 technologies with traditional finance.
Looking Ahead
With the recent passage of the Stablecoin Bill and moves to adopt European-style regulations for crypto over-the-counter (OTC) derivatives, Hong Kong is clearly setting the stage to become a global leader in crypto regulation and innovation.
By carefully balancing innovation with investor protection, Hong Kong is showing that crypto growth doesn’t have to come at the expense of financial stability.
