Hong Kong Insurance Authorityis working on new rules that will reshape the capital structure of insurers. The draft framework, seen by Bloomberg and dated December 4, envisages the highest level of risk burden for investing in cryptocurrencies. The planned regulation makes crypto’s position in Hong Kong’s financial strategy even more visible as we approach 2026.
100 Percent Risk Burden Comes to Cryptocurrency Investment
According to the draft framework, the Hong Kong Insurance Authority will ensure that insurance companies cryptocurrencyIt plans to apply 100 percent risk reserve to its positions regarding . The proposed approach in the risk-based capital regime significantly increases the capital requirements of cryptocurrencies, making crypto more “expensive” in insurers’ balance sheet planning.
In editing stablecoin For the side, a more nuanced model stands out. Stablecoin investments regulated in the Hong Kong jurisdiction will be evaluated based on the risk equivalent of the underlying fiat currency. Thus, the risk carried by the stablecoin will be directly associated with the underlying fiat currency.
The framework quoted by Bloomberg states that capital is invested not only in crypto money but also in state-backed capital. infrastructure projectsnor does it point to an architecture that aims to orient itself. While the draft text is kept open to revision, the question of “how much capital will be allocated to which asset” is brought to a clearer ground through capital rules.
Hong Kong’s Advisory Calendar
It is planned that the regulation will be submitted for legislative evaluation after the public consultation process will be carried out in the February-April period. The Hong Kong Insurance Authority said in a statement to Bloomberg that it had been reviewing the risk-based capital regime since the beginning of the year and that the target was insurance He stated that his aim is to contribute to broader economic development goals while supporting the sector.
The backdrop comes as Hong Kong accelerates its bid to become a cryptocurrency hub. Authorities have introduced licensing frameworks for virtual asset trading platforms and stablecoin issuers.
in november Hong Kong Securities and Futures CommissionThe circulars published by ‘s aim to strengthen liquidity and expand the product range in local cryptocurrency exchanges. The circulars aim to make the functioning of the local market more competitive by opening the access channel to global liquidity through common order books.
