Hong Kong Moves to Ease Bank Capital Rules for Crypto

• HKMA proposes CRP-1 easing Basel crypto capital rules for banks
• Hong Kong spot ETFs grow as regulators push softer crypto rules
• Basel standards seen as too strict; Hong Kong moves to compete

The Hong Kong Monetary Authority (HKMA) has put forward a supervisory policy known as CRP-1, designed to make it easier for banks to handle crypto assets. The draft framework lays out how lenders can classify tokens under the Basel Committee on Banking Supervision (BCBS) standards, which are due to take effect in early 2026.

Under current Basel rules, banks must hold a dollar in capital for every dollar of volatile crypto exposure, an approach many see as too restrictive. CRP-1 would let certain assets like Bitcoin (BTC) and Ethereum (ETH) qualify for lighter treatment, giving banks room to expand into crypto without tying up as much capital

Why Hong Kong Wants Softer Basel Crypto Standards

Global peers are already moving quickly. U.S. regulators, backed by the Trump administration, have advanced frameworks that make stablecoins and tokenized assets more practical for banks. If Hong Kong sticks with the Basel rules as-is, local lenders could fall behind. 

Related: Hong Kong University Business School to Accept Bitcoin for Tuition and Donations

The HKMA’s push signals a bid to protect Hong Kong’s status as a global crypto hub. Regulators there are balancing two goals: giving banks flexibility to offer crypto services and preventing the kind of systemic risks highlighted by collapses like JPEX and Atom Asset Exchange.

Spot ETFs and Stablecoin Laws Show a Wider Strategy

The proposed CRP-1 framework doesn’t stand alone. In May 2025, Hong Kong lawmakers passed a stablecoin bill, laying the groundwork for Hong Kong dollar-backed tokens. At the same time, the Securities and Futures Commission (SFC) has begun licensing exchanges such as HashKey under the Virtual Asset Service Provider regime.

Spot ETF adoption also shows demand. Data from SoSoValue indicates Hong Kong’s Bitcoin ETFs now hold roughly $493 million in net assets, while Ether ETFs are approaching $133 million. That makes Hong Kong one of the first markets outside the U.S. to host regulated BTC and ETH spot products. 

What Softer Rules Could Mean for Global Crypto Finance

If the CRP-1 framework is implemented, it could ease the entry of banks into crypto, giving institutional investors a safer bridge into digital assets. Analysts see it as part of Hong Kong’s broader strategy to compete with U.S. and European markets by offering a more flexible regulatory base.

With stablecoin bills passed, spot ETFs gaining traction, and now softer bank rules in play, Hong Kong is positioning itself as a test bed for mainstream tokenized finance. If successful, the city could strengthen its claim as Asia’s leading crypto hub while pressuring other regions to follow suit.

Related: Binance’s CZ Says Tokenization to Drive Crypto Growth, Calls on Hong Kong to Act Fast