Crypto Regulation News: Hong Kong Unlocks International Crypto Liquidity and More

2025-11-16

Hong Kong has taken another confident step in its ambition to become a global centre for digital assets. Regulators have updated key crypto regulation standards to allow local trading platforms to link with their global counterparts. Check out this crypto regulation news here!

This marks a significant shift from previous restrictions and reflects the city’s commitment to modernizing its virtual asset ecosystem.

As the global industry awaits clarity from major jurisdictions, the latest crypto regulation news from Hong Kong shows a clear intention to attract capital, improve market efficiency and support responsible innovation.

This development also positions Hong Kong crypto markets for broader international participation.

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Hong Kong Opens the Door to Global Liquidity

Crypto Regulation News.

The Hong Kong Securities and Futures Commission (SFC) issued a new circular on November 3 that reshaped the rules for virtual asset trading platforms. The update allows licensed platforms in Hong Kong to share their order books with affiliated entities abroad.

Previously, platforms operated under ring fenced conditions designed to maintain domestic stability and protect investors. However, as global digital asset adoption grows, the regulator now considers connectivity with international markets essential.

This decision allows Hong Kong crypto platforms to access deeper liquidity pools. According to the circular, investors are expected to benefit through more efficient pricing and a healthier level of market competition.

The SFC believes this approach will support Hong Kong’s broader objective of becoming a major digital asset hub.

Requirements to Manage Cross Border Risks

The SFC acknowledged that global order book sharing introduces additional responsibilities. Settlement risks increase when several jurisdictions interact in the same trade cycle, and surveillance becomes more complex as platforms coordinate across borders. To address these concerns, the regulator outlined several conditions.

Licensed platforms may only share order books with related entities located in jurisdictions that follow robust international regulatory standards.

They must also implement strong pre-trade and post settlement procedures, and maintain sufficient financial safeguards to compensate clients in the event of settlement failure. This approach aims to protect market participants while still opening pathways to global liquidity.

Expanded Access to Stablecoins and Tokenized Assets

On the same day, the SFC issued a second circular that lifted restrictions on the listing of certain crypto assets.

Stablecoins that are approved by the Hong Kong Monetary Authority may now be listed and traded on licensed platforms without the requirement for a previous track record. This means retail investors will have more direct access to regulated stablecoins.

The circular also permits trading of tokenized securities, provided platforms meet the required conditions and obtain necessary approvals. These measures help align the SFC’s framework with the HKMA’s regulatory work on stablecoins and tokenized financial instruments.

Both updates support the ASPIRE roadmap, the city’s long term plan to strengthen innovation within virtual asset markets.

United States Struggles to Advance the CLARITY Act

While Hong Kong advances its regulatory maturity, progress in the United States remains uncertain. Key senators are working to revive the Digital Market Clarity Act of 2025 after several delays.

The Act aims to resolve the long standing overlap between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Industry advocates argue that this clarity is essential for boosting confidence in the United States digital asset landscape.

Political disagreements have slowed movement. Concerns regarding potential conflicts of interest linked to the Trump family, as well as proposals to extend oversight to decentralized finance protocols, caused debates within the Senate Banking Committee to pause.

Although lawmakers from both parties have recently expressed optimism, it remains unclear whether the legislation will pass before the 2026 midterm elections. A further delay could weaken the United States position in global crypto innovation.

Canada Introduces Plans for Stablecoin Regulation

Canada is also moving toward clearer regulatory structure. Its 2025 budget includes plans to introduce legislation for fiat backed stablecoins, with oversight to be managed by the Bank of Canada beginning in 2026.

The proposed framework includes requirements for reserves, redemption rights, and consumer protection measures that align with policies in jurisdictions such as Hong Kong, the United States and the European Union.

Additionally, Canada plans amendments to the Retail Payment Activities Act to ensure that payment providers handling stablecoins are properly supervised. These efforts reflect the government’s broader goals to modernize the payments sector and support economic growth.

Australia Pushes for Innovation Through Clearer Rules

Australia continues its effort to remain competitive in digital asset innovation. The Australian Securities and Investments Commission recently released several regulatory documents, including a consultation paper proposing exemptions for distributors of approved stablecoins and wrapped tokens.

Under these rules, financial services firms with existing licenses would not need to secure additional approvals to distribute newly issued compliant tokens.

The regulator also intends to allow omnibus accounts for digital assets as long as firms maintain strong risk management practices. These initiatives are designed to help the Australian digital asset market develop more quickly while maintaining regulatory standards.

European Union Considers Centralizing Oversight Under ESMA

The European Union is preparing a proposal to place all crypto exchange supervision under the European Securities and Markets Authority.

While the Markets in Cryptoasset framework already requires service providers to meet uniform standards, varying levels of scrutiny across member states have created inconsistency.

A centralized authority would address this concern, but the industry has warned that too much centralization could hinder innovation. The proposal is expected in December and is likely to spark considerable debate within the region.

FAQ

What is the regulation of cryptocurrency?

In the U.S., the CFTC (Commodity Futures Trading Commission) is the federal agency that regulates cryptocurrencies. The CFTC treats cryptocurrencies as commodities under the Commodity Exchange Act.

What does regulation mean in crypto?

Cryptocurrency regulation refers to the rules set by governments that define how digital assets can be issued, traded, stored, and integrated into financial systems. These rules are constantly changing and vary greatly from country to country.

What is the new regulation of crypto?

In India, the government introduced two major tax changes in 2022: a 30% tax on crypto income and a 1% TDS (Tax Deducted at Source) on all crypto transactions. This came after the Supreme Court overturned the RBI's 2018 ban on banks dealing with crypto.

What is the 2026 regulation for crypto?

Starting on January 1, 2026, crypto service providers and exchanges will be required to collect data on users' activities and report transaction details to HMRC (the UK tax authority) for UK residents. Users must comply and provide the requested information to these service providers.

Crypto-Regulation

Disclaimer: The content of this article does not constitute financial or investment advice.

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