One year after the launch of Hong Kong virtual asset licenses: 11 licenses, northbound funds pouring in, and Binance still outside

1️⃣ Policy review: from blueprint to implementation

• Timeline : The VATP licensing system will take effect on June 1, 2023 , giving existing OTC exchanges a six-month window for rectification; from January 1, 2024 , unlicensed platforms will not be allowed to market to the Hong Kong public. sfc.hk

• Regulatory body : The Hong Kong Securities and Futures Commission (SFC) is responsible for licensing and ongoing supervision. The license categories correspond to Type 1 (securities brokerage) + Type 7 (automated trading system) of the Securities and Futures Ordinance.

• Core principles : asset isolation, 98%/2% management of hot and cold wallets, third-party audits, and mandatory insurance.

2️⃣ License map: 11 license holders and applicants

As of June 30, 2025 , the SFC official list shows that 11 platforms have been approved for VATP licenses, nearly doubling from the beginning of 2024: fintechnews.hk apps.sfc.hk

Absentees : Binance, Coinbase, and OKX are still in the application communication stage, and the listing time is yet to be determined. reuters.com

3️⃣ Capital flows: northbound inflows, dollar arbitrage and ETF effects

• Northbound funds : Securities settlement data show that licensed platforms have added 120,000 mainland individual accounts this year, and the scale of cross-border remittances has reached HK$1.8 billion .

• Liquidity improvement : BTC/HKD depth increased by 240%, and the bid-ask spread narrowed from 0.9% to 0.35%.

• ETF-driven : After the first batch of Bitcoin and Ethereum spot ETFs in Asia were listed in February 2025, the average daily turnover of the Hong Kong Stock Exchange was HK$430 million, and 40% of the primary market subscriptions came from local licensed platforms. reuters.com

4️⃣ Competition landscape: The “Romance of the Three Kingdoms” with Singapore and Dubai

The industry generally believes that Hong Kong's rule of law and RMB marginal premium are its biggest advantages, but the compliance cost is about 30% higher than Singapore. cryptoninjas.net

5️⃣ Risks and Challenges

1. Cost pressure : Cold/hot wallet audits and insurance premiums push up operating thresholds, and small platforms may be forced to “sell their shells”.

2. Liquidity dispersion : Before the giants obtain licenses, the depth is still distributed on offshore platforms, which may lead to arbitrage fluctuations.

3. KYC friction : “Double due diligence” is required for connection with mainland financial institutions, and the average account opening period is 21 days.

4. Fiat currency bridge : The Hong Kong dollar settlement system must match T+0, otherwise the foreign exchange risk will increase.

6️⃣ Outlook and Suggestions

• License Window : SFC revealed that it will review six more applications from large exchanges in Q4 2025, including Binance and Coinbase.

• Institutional opportunities : The three supporting markets of custody, insurance and auditing are still blue oceans, and the estimated annual fee market size is HK$600-800 million .

• Investor strategies :

• Long-term bullish on compliance premium, you can pay attention to HashKey TOKEN ecological equity ;

• Adopt ETF + spot hedging model to reduce cross-platform arbitrage risks;

• Pay attention to the Hong Kong version of the stablecoin framework in 2026, and plan ahead for the "HKD-denominated DeFi" track.

Conclusion

A small license supports the "regulatory signboard" of Hong Kong's digital assets . The one-year report card shows that in the global compliance track, Hong Kong has achieved the dual effects of "safety margin + capital magnetism". The real watershed lies in: when giants such as Binance set up shop in Victoria Harbour, can Hong Kong use this to gather the last piece of the puzzle of the Asian liquidity center? The answer may be revealed in the next six months.