Hong Kong Plans New Crypto, Infrastructure Rules for Insurers

The Hong Kong Insurance Authority is proposing a slate of new rules to channel insurance capital into assets including cryptocurrencies and infrastructure — an unprecedented move that would redirect funds to government‑prioritized sectors.

The insurance regulator would impose a 100% risk charge on cryptoassets, according to a presentation on Dec. 4 seen by Bloomberg News. Stablecoin investments would attract risk charges based on the fiat currency the Hong Kong-regulated stablecoin is pegged to, the document showed.

The regulator’s proposal, which could still change, will be open for public consultation from February through April, followed by legislative submissions.

In a statement to Bloomberg News, the regulator said it has commenced a review on the risk-based capital regime this year with a primary objective to support the insurance industry and wider economic development.

“We are at the stage of gauging industry feedback and will also put the proposals for public consultation in due course,” a spokesperson with the regulator said.

Hong Kong has been actively building a framework to support the development of cryptoassets and stablecoins as part of its strategy to become a top digital finance hub. The city’s de facto central bank expects to grant the first batch of stablecoin approvals early next year.

The insurer framework also touches on infrastructure, as Hong Kong seeks new growth.

For infrastructure, the regulator proposes capital incentives for investing in Hong Kong or the mainland, or projects listed or issued in the financial hub. Eligible projects include new towns and urban area developments in the city such as the Northern Metropolis. One objective for such a proposal is to support the government’s initiatives for local infrastructure development, according to the presentation.

The Hong Kong government, facing a deficit, has been trying to get private capital to help build the Northern Metropolis, an area that borders the mainland, as a tech hub. The insurance regulator said it operates independently of the government.

Some firms are submitting feedback hoping to extend coverage of a broader range of infrastructure projects, as the current framework provides limited options, according to people familiar with the matter, who requested not to be named discussing private details.

As of June, there were 158 authorized insurers in the city. Together, the total gross premiums of the Hong Kong insurance industry stood at about HK$635 billion ($82 billion) in 2024.

Photograph: Hong Kong has been actively building a framework to support the development of crypto assets and stablecoins as part of its strategy to become a top digital finance hub. Photo credit: Paul Yeung/Bloomberg