Hong Kong is taking steps to ease the rules around banks’ cryptocurrency holdings.
The Hong Kong Monetary Authority (HKMA), the equivalent of a central bank, has circulated plans for easing the capital requirements for banks holding cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).
The central bank released a draft paper for public comment with a view to clarifying the guidance on capital regulation for crypto assets, which it plans to implement in 2026.
The draft guidelines focus on lowering bank capital requirements if issuers can take appropriate steps to minimize and respond to risks.
Hong Kong has emerged as one of the world's cryptocurrency capitals, helped in part by a favorable regulatory regime.
The special economic zone of China released its long-awaited guidance on stablecoins in August, following a rush of applications from prospective issuers.
A switch to more lenient capital requirements for banks holding cryptocurrencies could help further burnish Hong Kong's status as a global hub for digital assets, say analysts.
Bitcoin, the biggest cryptocurrency by market capitalization, is currently trading at $114,300 U.S., having gained 22% on the year.
