Hong Kong Monetary Authority to Implement Basel Capital Regulations for Crypto Assets in 2026

According to news from HashKey Group, the Hong Kong Monetary Authority recently issued a circular confirming that it will fully implement the new banking capital regulations based on the Basel Committee on Banking Supervision's standards for crypto asset regulation in Hong Kong starting January 1, 2026. Fei Si, a partner at King & Wood Mallesons and a lecturer at the University of Hong Kong Faculty of Law, stated in an interview that the new regulations set the risk weight for crypto asset exposures using unlicensed blockchain technology at a maximum of 1250%, meaning banks will need to hold capital at a ratio of at least 1:1 against these crypto asset exposures. Such high regulatory capital requirements will lead many banks to be unwilling to hold these types of crypto assets.