Hong Kong Set to Permit Crypto Derivatives Trading for Professional Investors

Hong Kong's Securities and Futures Commission (SFC) is preparing to authorize professional investors to trade cryptocurrency derivatives, signaling a major development in the city's virtual asset ecosystem, according to China Daily. This regulatory shift would broaden market access and align Hong Kong more closely with global digital asset hubs.

Crypto derivatives are a significantly larger segment of the market compared to spot trading. Data from TokenInsight reveals that crypto derivatives saw a trading volume of $21 trillion in the first quarter of this year, far outpacing the $4.6 trillion in spot transactions. This underscores the growing importance of derivative products in the digital asset industry, particularly for institutional and professional traders seeking to hedge or amplify exposure.

Industry players have long advocated for such regulatory clarity. Jean-David Péquignot, Chief Commercial Officer of Deribit—one of the world’s leading crypto derivatives exchanges—highlighted earlier this year that the lack of a clear framework for derivatives was a major gap in Hong Kong’s crypto regulation. The upcoming changes could position Hong Kong as a more attractive jurisdiction for crypto firms and investors, especially amid tightening regulations in other regions.

This move follows Hong Kong’s broader push to become a regulated digital asset hub. The city’s legislative council recently passed a bill enabling stablecoin licensing, further reinforcing its commitment to building a compliant and comprehensive virtual asset infrastructure.

As the SFC finalizes its policy, crypto market participants are closely watching for details that could open the door to new institutional products and deepen liquidity in the region. The expected approval of crypto derivatives trading would mark a milestone in Hong Kong’s evolving digital finance landscape.