Hong Kong SFC Says It Is Upgrading Digital-Asset Rules to Pursue ‘Responsible Innovation’

Hong Kong’s Securities and Futures Commission said it will continue refining its digital-asset regime and support the financial sector’s use of artificial intelligence. The effort is aimed at strengthening the city’s competitiveness as an international financial hub while advancing new technology alongside investor protection.

SFC Chief Executive Officer Julia Leung said the regulator is pursuing “responsible innovation.” That means backing technological development while taking investor protection, market integrity and financial stability into account.

Hong Kong is developing rules covering digital-asset trading, custody, advisory services and asset management, she said. The measures are intended to build a stronger regulatory framework for emerging financial technology.

“Our principle is same business, same risks, same rules,” Leung said. In other words, the same financial activities and risks should be subject to the same regulation.

The remarks underscore Hong Kong’s continued push to foster a regulated virtual-asset industry. The city is seeking to bring digital assets into the regulated financial system while managing risks tied to market order, custody safety, cybersecurity and investor protection.

Leung said AI has become an important part of financial services. But she cautioned that financial institutions need to prepare for risks including inaccurate outputs, model bias, data privacy issues and cyber threats as they adopt the technology.

The SFC and other Hong Kong financial authorities are also expanding sandbox programs that allow financial firms to test generative AI use cases in controlled settings. The initiative is meant to support AI adoption in finance while managing risks that may emerge during testing.

Beyond digital assets and AI, Leung said Hong Kong also needs to strengthen its bond, foreign-exchange and offshore yuan markets while maintaining the competitiveness of its stock market. She said regulatory predictability is important amid geopolitical uncertainty, market volatility and rapid technological change.

She also said the SFC will serve as both a market watchdog and an enabler. Regulation should help create a predictable environment for innovation and capital formation.

Hong Kong’s simultaneous focus on digital assets and AI in finance is central to its broader institutional strategy as it seeks to strengthen its position in the race to become Asia’s virtual-asset hub.