Hong Kong’s top financial regulator has announced plans to allow licensed cryptocurrency platforms to connect with global order books, a move aimed at boosting trading activity and deepening market liquidity in the region.
The Securities and Futures Commission (SFC) issued a new circular outlining the framework, which will enable locally licensed exchanges to match orders with those from overseas affiliates — provided those affiliates are properly licensed and comply with international regulatory standards.
SFC Chief Executive Julia Leung revealed the plan during her keynote address at Hong Kong FinTech Week 2025, saying the initiative would “help investors access global liquidity efficiently, enhance price discovery, and deliver more competitive prices.”
Shared Order Book Model Introduced
Currently, Hong Kong crypto exchanges operate under a “pre-funded and instantly settled” model, where client orders are matched only within each platform’s closed system.
Under the new framework, exchanges can now implement a “Shared Order Book” that connects local platforms with their global counterparts. This allows cross-platform trade matching — as long as all entities meet SFC licensing and compliance criteria.
To reduce cross-border risks, the SFC requires all participating exchanges to use:
- Automated pre-trade verification systems to ensure clients have sufficient settlement assets.
- A delivery-versus-payment mechanism to prevent mismatched settlements.
- Daily settlement reconciliation with overseas entities.
- A reserve fund held in Hong Kong, “on trust,” to protect clients in case of settlement failure.
Additionally, platforms must conduct joint surveillance with their foreign affiliates and assign compliance officers to monitor and report misconduct or market manipulation alerts in real time.
Retail Access and Risk Disclosures
The SFC emphasized that retail investors can only access global order books if they are fully informed of the related risks and formally opt in.
“Overly strict requirements risk driving liquidity and talent to lighter-touch jurisdictions, but too little oversight could undermine trust and stability,” Leung said.
She added that the SFC may soon permit licensed crypto brokers to access these global liquidity pools as well — potentially opening a path for major players like Binance to enter Hong Kong under a broker license, without needing a full exchange license.
Muted Market Activity and Regulatory Adjustments
Despite Hong Kong’s ambition to establish itself as a leading digital asset hub in Asia, crypto trading volumes have remained relatively low compared to more active jurisdictions such as the United States and Japan.
According to data from Chainalysis, Hong Kong still trails regional markets including India, Vietnam, and Japan in crypto adoption and transaction volume.
Some of the resistance has come from mainland Chinese authorities, who remain cautious about privately issued cryptocurrencies and the risks of cross-border stablecoin transactions.
Nevertheless, Hong Kong regulators continue to refine their framework to attract institutional and professional investors. In a separate circular released on November 3, the SFC removed the previous 12-month trading history requirement for listing new tokens and HKMA-approved stablecoins, enabling faster token listings for professional investors.
Analysis: Balancing Oversight and Innovation
Analysts say the move to integrate global order books is a major step toward market maturity, aligning Hong Kong’s regulatory landscape with global standards.
By merging local compliance rigor with international liquidity, Hong Kong aims to create a trusted yet competitive environment for both retail and institutional participants.
However, the success of this framework will depend on market response, technological readiness, and the ability of regulators to monitor cross-border activity without stifling innovation.
