Hong Kong gearing up to give crypto derivatives the go-ahead
Hong Kong regulator, the Securities and Futures Commission (SFC), which oversees Hong Kong’s securities and futures markets, is understood to be planning to give the go-ahead for crypto derivative products to be offered to professional investors within the Chinese autonomous territory.
Chinese English-language newspaper China Daily reported on June 4 that the proposed move forms part of Hong Kong’s efforts to expand its digital assets-related product offering in order to further bolster its position as a leading regional hub for the sector.
Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, told the publication that the SFC will open up crypto derivatives trading to professional investors in the city “in an orderly, transparent and secure manner.”
Boosting liquidity to spot markets
China Daily claimed that the SFC outlined that the crypto derivatives product will enable efficient risk transfers, while boosting the liquidity of the underlying spot markets. TokenInsight data suggests that the global crypto derivatives market has reached $21 trillion in trading volume over the course of Q1 2025. By comparison, derivatives trading dwarfs spot trading, given that spot trading weighed in at just $4.6 trillion over the same period.
Liquidity in the underlying spot markets can be enhanced by a broadening of crypto derivatives product offerings in instances where digital assets are traded for immediate payment and delivery. Their availability will also appeal to professional traders and investors who need access to derivatives as part of their overall strategies in order to hedge positions and add leverage when required.
Industry interest
Reaction to news of the Hong Kong SFC’s plans has largely been positive. Back in February, Jean-David Péquignot, chief commercial officer (CCO) with the world’s largest crypto derivatives exchange Deribit, told the South China Morning Post that opening up availability of crypto derivatives products was the one item missing from Hong Kong’s push towards development as a hub for the digital assets sector. At the time, he stated:
“Hong Kong is this central financial hub in the world and a big one in Asia. If regulators can solve the derivatives piece, it is a place where we love to be.”
On that basis, Péquignot suggested that Deribit, headquartered in Dubai, would be interested in establishing itself in Hong Kong, suggesting that “Asia is a big market for derivatives.” He added:
“We want to be in Asia. We just need to find the right place and time to engage with regulators and get a regulatory framework to work with.”
The company’s acquisition by Coinbase was announced last month for $2.9 billion.
Regulatory approach questioned
While many see the move towards the approval of crypto derivatives in Hong Kong as bullish, not everyone perceives the regulator’s approach in this instance to be positive. Pseudonymous crypto trader “Pickle Cat” outlined on X that “opening crypto derivatives only to 'professional investors' isn’t progress.”
The trader points out that good regulation would concentrate on controlling issuance and not circulation. Suggesting that the SFC has missed the point in its approach, the trader claims that the regulator would serve the crypto derivatives market best by verifying what backs such products while not restricting how such tokens move.
