Japan progresses bill to enable VCs to hold crypto assets

Hong Kong–listed companies are stepping up digital-asset bets as the city sets out a clearer rulebook, a sign that tighter oversight and new market rails are starting to unlock institutional demand.Photo by Ruslan Bardash on UnsplashCorporate moves signal rising appetiteBoyaa Interactive International has been adding Bitcoin (BTC) to its treasury, with the latest acquisition of 411 BTC bringing its total holdings to 4,091 BTC. The gaming company has said it will direct 90% of a planned $56.3 million rights issue into Bitcoin. Yunfeng Financial raised HKD 1.17 billion, or about $150 million, through a new share issuance and plans to use part of the proceeds to launch cryptocurrency trading and investment management services. The firm is associated with Yunfeng Capital, which was co-founded by Alibaba founder Jack Ma, and has previously outlined plans to accumulate BTC, Ethereum (ETH), and Solana (SOL). These moves land alongside a policy reset from the top. In his annual address on Sept. 17, Chief Executive John Lee reaffirmed Hong Kong’s goal of cementing its position as an international hub in finance, including digital assets, while pairing that ambition with stronger investor safeguards. Tokenization and blockchain testbedThe centerpiece is Project Ensemble, run by the Hong Kong Monetary Authority (HKMA). The initiative is building infrastructure for a tokenized market and operates a sandbox where institutions can test blockchain systems in live business settings. Priorities include tokenized bank deposits, settlement of tokenized assets such as money market funds, and standardized issuance of government tokenized bonds. Regulation is advancing in parallel. The government is preparing legislation for a licensing regime that covers stablecoin issuers as well as digital-asset dealing and custody providers. The Securities and Futures Commission is studying an expansion of products for professional investors, with tougher protections baked in. The regulator plans to use automated reporting and data surveillance to curb misconduct. Authorities also intend to deepen cross-border cooperation to combat tax evasion. Banking rules are set to shift as well. The HKMA has circulated draft guidance that would ease capital requirements for certain crypto exposures in line with Basel standards through a new policy module called CRP-1. Under the proposal, assets issued on permissionless blockchains could qualify for lower capital charges when issuers demonstrate effective risk management. Hong Kong aims to implement the international rules by early 2026.Publicly traded BTC treasury firms in China Source: BitcoinTreasuries.NETAdoption amid constraintsNot every institution will join the build-out. Mainland policies may constrain participation, according to Caixin. Chinese digital platforms, state-owned enterprises (SOEs), and financial entities operating in Hong Kong could face limits on stablecoin and other crypto activity. Branches of several SOEs and Chinese banks are also unlikely to seek a Hong Kong stablecoin license. Corporate adoption remains broad despite those headwinds. Publicly traded Bitcoin treasury companies in China and Hong Kong hold a combined 19,280 BTC, according to BitcoinTreasuries.net. Several appear among the top 50 public corporate holders worldwide, including Next Technology Holding (16th), Cango (18th), Boyaa (24th), Nano Labs (48th), and Ming Shing Group (50th). The tally points to rising regional interest in digital assets. Publicly traded BTC treasury firms in Hong Kong Source: BitcoinTreasuries.NET

Surge in Hong Kong Crypto License Applications from Mainland-Linked BrokersTwo new platforms with mainland China links are preparing to apply for retail trading licenses in Hong Kong, with several others believed to be interested in following suit.According to a report published by Nikkei Asia earlier this week, the platforms, Yax and PantherTrade, have connections to mainland online securities brokers. PantherTrade is reportedly associated with Futu, a company which in turn is backed by Chinese tech giant Tencent, one of China’s largest technology companies. Yax, an emerging player in the crypto sector, has strong links to UP Fintech Holding, a Beijing-headquartered firm more commonly known as Tiger Brokers.Photo by Kanchanara on UnsplashCapital flight concernsThese connections are significant, given the previous involvement of these brokers in helping mainland Chinese customers invest in offshore assets, primarily US stocks. The firms have previously attracted the attention of China’s financial regulators. A notice from the Chinese securities watchdog in December last year compelled them to cease their “illegal cross-border business” activities.While crypto trading is banned in mainland China, an investigative report by the Wall Street Journal in August suggested that global exchange Binance was thriving in China despite the ban. Actions taken by the Chinese authorities are demonstrative of some level of concern with regard to crypto trading and potential capital flight through crypto.VASP licensingThe move by Yax and PantherTrade signals their intention to apply for a virtual asset service platform (VASP) license in Hong Kong, which would enable them to operate cryptocurrency exchanges for retail customers.Currently, both platforms are undergoing third-party assessments, a mandatory step preceding their formal application to the Securities and Futures Commission (SFC). The timeline for their applications remains uncertain.Broader interestThe growing interest in VASP licenses is not unique to Yax and PantherTrade. At least four other exchange platforms, similarly linked to mainland China, have also sought the same license, highlighting the eagerness of various players to enter the Hong Kong market. OneDegree, the sole licensed insurer for digital assets in Asia, has observed a significant uptick in license applications, including applications from traditional financial institutions, reflecting a positive trend toward educating the mass market.The SFC’s recent decision to make license application information public is an attempt to enhance transparency, following a scandal related to Dubai-headquartered crypto exchange JPEX in which over HK$1.5 billion (approximately $190 million) in virtual assets reportedly disappeared from the exchange.Currently, only two cryptocurrency exchanges, OSL and Hashkey, have received SFC approval. Others, including online brokers, have considered applying for licenses since late last year but are awaiting greater regulatory clarity before taking the plunge.Hong Kong, under the “one country, two systems” framework, has established itself as a hub for legal retail trading of cryptocurrencies. This development may signify a shift in China’s stance on digital assets and its increasing openness to crypto initiatives, as noted recently by blockchain data provider Chainalysis.

Venture Smart Financial Holdings Ltd. (VSFG), a Hong Kong-based financial services company, is gearing up to initiate an exchange-traded fund (ETF) directly investing in bitcoin in the first quarter of this year.Photo by Kanchanara on UnsplashThat’s according to a report by Bloomberg on Friday. The move aligns with Hong Kong's strategic efforts to establish itself as a digital asset hub, and with that, the company plans to submit an application to the Securities and Futures Commission (SFC) for ETF approval. Brian Chan, the group head of investment and product at VSFG, expressed optimism about the potential of this market, setting a goal of achieving $500 million in assets under management by the end of the year. Long-term objectiveWhile the firm has taken the decision to focus on spot crypto ETFs amid a backdrop of spot bitcoin ETF approval in the United States earlier this month, it’s an objective the firm has been working on for some time. In June of last year, crypto media reported that VSFG were planning the launch of such a product. Notwithstanding that intention, the recent launch of several high-profile bitcoin funds in the United States, including offerings from BlackRock and Fidelity Investments, will likely assist the company in getting product approval in Hong Kong. Immediately following U.S. approval, a Hong Kong lawmaker suggested that the Chinese autonomous territory should respond proactively. Johnny Ng outlined that Hong Kong had to respond to secure its global position in developing the digital assets space in Hong Kong. Positive soundingsTowards the end of December, there appeared to be positive soundings on the possibility of spot bitcoin ETF approval in Hong Kong emerging from the local regulator. SFC CEO Julia Leung stated that the regulator was open to the notion of retail participation in spot crypto ETF products. Her comment was followed shortly afterwards by a joint announcement from the SFC alongside the Hong Kong Monetary Authority (HKMA) that they were prepared to accept applications for such funds. The approval process for such products typically takes weeks to months, following the precedent of traditional ETFs. Hong Kong presently permits futures-based crypto ETFs, with three already listed: CSOP Bitcoin Futures, CSOP Ether Futures and Samsung Bitcoin Futures. However, these funds have a combined asset value of around $50 million. Samsung Asset Management has not ruled out exploring the launch of a spot ETF, while CSOP Asset Management remains silent on the matter. VSFG is one of Hong Kong's first SFC-approved virtual asset managers, offering both traditional and digital wealth management services. Aegis Custody, a digital asset custodian, is in discussions with four asset managers about listing spot crypto products in Hong Kong. The regulatory requirements in the city may lead issuers to impose higher fees compared to the low management levies seen in many new U.S. spot bitcoin ETFs. Although bitcoin experienced substantial growth in anticipation of these U.S. products, it has seen a 10% decline since their trading commenced on Jan. 11. Nevertheless, many industry commentators expect a stronger bitcoin unit price in the medium to long term as a direct consequence of these products.