Hong Kong launches public consultation on crypto asset classification in banking. What does this mean?

The Hong Kong Monetary Authority (HKMA) continues to consolidate its role as a leader in the digital financial world with a proposal to modernize banking regulation regarding cryptoassets.

On September 8, the HKMA presented the CRP-1 draft, a key document that outlines how banks should classify and manage cryptoassets to calculate the capital required, a fundamental step in measuring risks and protecting financial stability.

This new regulatory module seeks to align local regulations with the Basel Committee international standards, bringing clarity and precision to a complex and constantly evolving issue. The initiative is part of a broader strategy that Hong Kong has been pursuing to create a robust, secure, and competitive digital financial ecosystem.

In this sense, CRP-1 joins other recent measures by the HKMA, such as the implementation of a licensing regime for stablecoin issuers, which demonstrate the city's commitment to balancing innovation and regulation. With these actions, Hong Kong is positioning itself as a dynamic financial center, capable of attracting investment and talent in the crypto space, without sacrificing transparency or the robustness of the system.

CRP-1: New regulatory language connecting banks to crypto assets in Hong Kong

CRP-1 is a new regulatory framework that seeks to translate cryptography into a format that banks can understand and apply clearly and practically. 

Proposed by the Hong Kong Central Bank (HKMA), this module is part of the Banking Supervision Policy Manual and proposes relaxing capital requirements for financial institutions that handle digital assets, especially those issued on public blockchain networks without permission. This means that, as long as banks follow good management practices, they will be able to adjust the capital they need to reserve according to the actual risk of their cryptocurrency investments, aligning with the international Basel standards that will come into force in 2026.

In essence, the CRP-1 offers an accurate classification of crypto assets so that financial institutions have clarity and confidence in expanding their participation in the crypto world in a supervised and orderly manner. 

With this initiative, Hong Kong seeks to create a regulatory environment that fosters innovation without compromising financial stability. This contrasts with other regions, such as the United States, where regulations for digital assets remain more restrictive to date, despite the current government's progress in this area. Furthermore, Hong Kong's proposal is open to public consultation, demonstrating the authorities' intention to maintain an open dialogue with crypto industry participants and adapt to this rapidly changing and evolving market.

More than just a technical adjustment, the CRP-1 is an open door toward a responsible and modern integration of cryptoassets into the traditional banking system, reducing the uncertainties that have hindered institutional entry and underpinning a future where regulation and innovation not only coexist, but also mutually enhance each other.

A comprehensive strategy: from the stablecoin regime to the banking ecosystem 

Since the beginning of the year, Hong Kong has been building a roadmap aimed at consolidating its position in the digital asset space. 

In August, the region took an important step by establishing a regulatory framework for stablecoins, which includes licensing requirements for issuers along with rigorous protocols for asset management and separation. This measure was positively valued by industry experts such as Chainalysis, who highlighted the fundamental role of stablecoins in facilitate international payments and settlements.

With the recent banking regulatory proposal CRP-1, which seeks to connect the controlled issuance of digital assets within the traditional banking system, Hong Kong establishes a comprehensive approach that differentiates it from the model adopted in mainland China, where policies have been much more restrictive. 

The incorporation of CRP-1 into the Banking Supervision Policy Manual provides guidance to financial institutions and sends a strong message to the market: digital assets are recognized as legitimate components within the local financial architecture.

In this context, the Hong Kong Monetary Authority (HKMA) plays a key role as a driver of this new phase, in which banking and cryptocurrencies are considered complementary elements of a common ecosystem. The public consultation on CRP-1 will allow for fine-tuning of technical aspects, while Hong Kong's overall objective remains clear: to lead the development of the digital financial future, moving forward with defined rules, transparent dialogue, and a long-term strategic vision.