digital asset derivatives for investors on the rise

The expansion of digital asset derivatives in Hong Kong is accelerating, with new initiatives aiming to strengthen the city’s role in the global digital asset market. 

This development is part of a broader strategy aimed at diversifying the offering of financial products and ensuring the security of transactions for professional investors.

Turning point for digital asset derivatives in Hong Kong

On June 4, Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury, officially confirmed the intention of local authorities to introduce trading of digital asset derivatives reserved for professional investors.

The main objective is to ensure that trading takes place in an orderly, transparent, and secure manner, thus emphasizing robustness in risk management. 

In this regard, the Securities and Futures Commission (SFC) of Hong Kong has clarified that investor protection and market stability will be prioritized in regulating these innovative instruments.

The interest in digital asset derivatives comes at a crucial moment. The global market for digital assets has surpassed 3 trillion dollars in total value, with annual trading volumes exceeding 70 trillion dollars, according to SFC data reported by China Daily HK. 

Hong Kong, therefore, positions itself as one of the main hubs in the growth of this sector, thanks also to advanced regulation policies and tax incentives.

In recent months, Hong Kong has already taken significant steps to expand the range of regulated digital products. In 2024, the following have been authorized:

– Staking services, which allow investors to earn rewards by locking digital assets;

– Exchange-Traded Funds (ETF) of spot and futures virtual assets, introduced in April and July respectively;

– Inverse futures products that offer new ways of derivative investment on digital assets.

In particular, in April 2025, the operator HashKey obtained approval to provide staking services, marking a further step towards the diversification of the offering.

Tax optimization to attract international investors

Hong Kong is also optimizing its fiscal framework to make the territory more competitive and attract global players in the digital asset sector. 

Digital assets will soon benefit from the tax advantages provided by the preferential regime dedicated to investment funds, single family offices, and carried interest. 

These measures create a more favorable environment for international operators who intend to establish or expand their activities in the city’s digital market.

The commitment of Hong Kong in the fintech sector is reflected in the growing number of companies active in the field. According to Hui, there are over 1,100 fintech enterprises, of which:

– 8 authorized digital banks;

– 4 virtual insurance companies;

– 10 regulated platforms for trading digital assets.

Furthermore, entities such as Invest Hong Kong and Hong Kong Key Enterprises Office offer integrated services to support businesses in obtaining licenses, accessing tax incentives, and complying with regulatory requirements. 

This synergy with the Greater Bay Area and mainland China consolidates Hong Kong’s position as a bull and bear technological and financial hub.

Since October 2022, with the first policy dedicated to virtual assets, Hong Kong has embarked on a path that introduced pioneering financial instruments in Asia, such as bull futures ETF on virtual assets and bear spot ETF products in 2024.

In September 2024, two of the city’s main financial regulators also decided to adopt the reporting requirements defined by the European Securities and Markets Authority (ESMA) for OTC derivatives on crypto, thus harmonizing local regulations with European standards.

The regulatory work does not stop here. Hong Kong is preparing a second statement on virtual asset policy, expected by the end of the year, with the aim of further integrating Web3 technologies into traditional financial services.

Stablecoin Regulation and Global Leadership

Another decisive step is represented by the approval, in May 2024, of the Stablecoin Bill, which establishes a regulatory framework for stablecoin. 

This measure can position Hong Kong as a global leader in the development of regulated digital assets and Web3 technologies.

The advancement of this regulation highlights the strong desire of the city to ensure safety and innovation in the digital market, stimulating sustainable growth in the sector.

The introduction of digital asset derivatives trading for professional investors represents a strategic move that consolidates Hong Kong as a reference hub for the global digital asset market. 

Thanks to clear rules, competitive tax incentives, and a dynamic fintech ecosystem, the city offers advanced and secure investment opportunities.

Professional investors will be able to benefit from a wider range of products, including sophisticated derivative instruments, facilitated by a modern and favorable regulatory environment.

As a result, the financial sector of Hong Kong is ready to see an increase in capital and innovations, positioning itself at the forefront in the world of digital assets.