Hong Kong to Enforce Basel Crypto Rules in 2026

The Hong Kong Monetary Authority (HKMA) is set to implement Basel-aligned crypto, stablecoin, and RWA banking capital rules starting January 2026. The move aligns Hong Kong’s financial regulations with global standards and aims to enhance financial stability.

Eddie Yue, Chief Executive of HKMA, highlighted that the amendment process involved multiple industry consultations. The HKSAR Government announced amendments focusing on prudent frameworks for banks’ crypto exposures to promote responsible innovation while maintaining financial stability.

These new rules mandate higher capital holdings for banks with crypto assets, impacting local financial institutions. Bitcoin, Ethereum, and regulated stablecoins fall under these capital requirements, affecting the reevaluation of current holdings by banks in Hong Kong.

The regulatory framework will demand $1 in capital for every $1 in volatile crypto exposure, while rules are friendlier toward stablecoins. Local banks must reassess crypto holdings, which might alter their investment strategies and market roles in the crypto sector.

The alignment with Basel standards marks Hong Kong as a leading Asia-Pacific region in crypto regulations. Banks will likely adjust their portfolios to meet new criteria. The Basel framework could greatly influence how institutions manage digital assets. Eddie Yue, Chief Executive of HKMA, stated, “The HKMA approach is aligning Hong Kong with EU’s MiCA framework trends for comprehensive cryptoasset oversight.” – source

These rules could create incentives for safer crypto engagements by treating assets like stablecoins more favorably. Market players might shift focus towards regulated crypto, aligning with historical precedence seen with EU’s MiCA standards for comprehensive oversight.