Hong Kong is moving closer to letting insurers channel capital into the crypto economy — but with strict safeguards attached.
According to Bloomberg, the Hong Kong Insurance Authority (IA) has floated new rules that would permit insurance companies to invest in digital assets, including cryptocurrencies and stablecoins, as well as related infrastructure projects. The move is part of a broader government push to position the city as a global digital-asset hub and to spur economic growth.
Under the IA’s December 4 presentation, purely crypto holdings would face a steep penalty: a 100% risk charge, meaning insurers would need to hold reserves equal to the full value of any crypto investments. Stablecoins would be treated differently — their risk charges would be aligned with the fiat currency to which a Hong Kong-regulated token is pegged. The regulator says it began reviewing the risk-based capital regime this year with the purpose of both supporting the insurance sector and contributing to wider economic development.
The draft framework also contemplates incentives for capital directed at local or mainland projects, and for investments in assets listed or issued in Hong Kong — part of an effort to channel institutional funds into the city’s financial ecosystem. The IA plans to open the proposals to public consultation from February through April 2026, after which changes and legislative steps could follow. A spokesperson told Bloomberg the regulator is currently gauging industry feedback and will publish the consultations in due course.
The IA’s push comes as Hong Kong’s insurance sector remains sizable: the regulator’s website lists 158 authorized insurers as of June 2025, and total gross premiums for 2024 reached HK$635 billion (about US$82 billion).
The regulatory developments overlap with separate—but related—work on stablecoins. The Hong Kong Monetary Authority (HKMA) enacted a Stablecoins Ordinance earlier this year that requires any issuer of a fiat-referenced stablecoin (FRS) or a Hong Kong-dollar–pegged token to obtain a license. Bloomberg reports the HKMA aimed to grant the first stablecoin issuer licenses at the start of 2026, though industry sources expect potential delays. More than 30 license applications have reportedly been filed this year, including by logistics tech firm Reitar Logtech and the overseas arm of Ant Group.
That timetable may be complicated by Beijing’s recent stance: the People’s Bank of China and other mainland regulators have reiterated that stablecoins are not legal tender in the mainland and flagged compliance and illicit-use risks. Legal scholars such as Brian Tang of the University of Hong Kong say that applicants will need to reassess applications that involve mainland issuers or users. The HKMA says it is reviewing applications and plans to begin with a reduced number of licenses; projects tied to the yuan or mainland institutions are likely to face delays.
What to watch next: the IA’s public consultation window in early 2026, any legislative moves that follow, and the HKMA’s licensing decisions — all of which will shape whether Hong Kong can attract insurance capital into crypto and whether the city’s stablecoin ambitions will proceed on the expected timeline.
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