Hong Kong SFC Says It Will Sharpen Digital-Asset Rules, Advance Responsible Innovation

Hong Kong’s Securities and Futures Commission said it will continue refining its digital-asset regulatory regime and support the financial sector’s use of artificial intelligence. The approach is aimed at strengthening the city’s position as an international financial hub while pursuing both technological development and investor protection.

SFC Chairman Tim Lui said the regulator is committed to “responsible innovation.” That means supporting technological progress while also taking into account investor protection, market integrity and financial stability.

Hong Kong is developing rules covering digital-asset trading, custody, advisory services and asset management, he said. The effort is intended to build a stronger regulatory framework for emerging financial technologies.

“The principle is same business, same risks, same rules,” Lui said, meaning the same financial activities and risks should be subject to the same regulation.

The remarks show Hong Kong is maintaining its push to develop a regulated virtual-asset, or cryptocurrency, industry. At the same time, the city is seeking to bring digital-asset markets into the regulated financial system while managing risks tied to market order, custody safety, cybersecurity and investor protection.

Lui also described AI as an increasingly important part of financial services. He said financial institutions must prepare for risks including inaccurate outputs, model bias, data privacy issues and cyber threats as they adopt the technology.

The SFC and other Hong Kong financial regulators are also expanding sandbox programs that allow financial firms to test generative AI use cases in controlled environments. The framework is designed to support AI adoption in finance while containing risks that could emerge during the testing process.

Beyond digital assets and AI, Lui said Hong Kong must also strengthen its bond, foreign-exchange and offshore yuan markets while preserving the competitiveness of its stock market. He said regulatory predictability is crucial amid geopolitical uncertainty, market volatility and rapid technological change.

Lui said the SFC will serve as both a market watchdog and an enabler. Regulation should help create a predictable environment for innovation and capital formation.

Market participants view Hong Kong as positioning digital assets and AI finance as twin pillars of its broader policy strategy as it seeks to bolster its standing in the competition to become Asia’s virtual-asset hub.