The Hong Kong Insurance Authority (HKIA) has introduced a new legal framework that allows the territory’s 158 licensed insurance companies to invest substantial capital in cryptocurrencies and related infrastructure projects. The proposal, outlined in the regulator’s presentation on December 22, 2025, signals a historic shift toward directing private insurance capital—about $82bn in premium revenue last year—toward sectors prioritized by the government. By establishing a formal pathway to incorporate digital assets into their balance sheets, Hong Kong aims to outpace other major financial hubs in attracting institutional cryptocurrency adoption.
Central to the HKIA’s proposal is a 100% risk-based capital requirement for direct cryptocurrency holdings. Under the RBC regime, insurers must maintain an equivalent dollar in working capital as a reserve for every dollar of Bitcoin or Ethereum held. While this high requirement classifies cryptocurrencies as a capital-intensive asset class, it establishes the first clear legal framework for insurance companies to venture beyond traditional stocks and bonds. Stablecoins are anticipated to receive more favorable treatment; investments in regulated stablecoins incur risk fees based on the specific fiat currencies to which they are pegged, which lowers barriers for using digital dollars in payments and liquidity management.
These regulations are currently in the feedback phase and may undergo revisions. A formal public consultation period is anticipated to occur from February to April 2026, inviting insurance companies and other stakeholders to provide input on risk weighting and the types of eligible projects.
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