Hong Kong will implement new banking digital asset regulations in 2026

According to PANews, the Hong Kong Monetary Authority has issued a circular announcing the full implementation of new capital regulations based on the Basel Committee on Banking Supervision's digital asset standards, which will come into effect on January 1, 2026. In an interview with Caixin, Faith, a partner at King & Wood Mallesons and a lecturer at the University of Hong Kong's Faculty of Law, explained that the new regulations set a maximum risk weight of 1250% for exposures to digital assets using permissionless blockchain technology. This means that banks must hold capital equivalent to at least a 1:1 ratio for these exposures to digital assets. These stringent capital requirements are expected to deter many banks from holding these types of digital assets.