Hong Kong plans to relax banking regulations for licensed stablecoins and select crypto assets. The consultation on the new CRP-1 framework is open until November 2025, set to be effective from January 2026. The proposal divides crypto into two groups based on stabilization mechanisms and risk, aiming to lower compliance costs and encourage innovation in tokenized products.

The Hong Kong Monetary Authority (HKMA) introduced CRP-1, a new supervisory policy manual aligning crypto classification with Basel Committee standards. If finalized, banks can treat licensed stablecoins as lower-risk assets, reducing capital requirements. The move aims to balance innovation with risk control, positioning Hong Kong as a gateway for global digital finance.

Stablecoins meeting the new standards could be held on bank balance sheets with reduced regulatory burden, while riskier assets will face heavier treatment. The dual-tier system categorizes assets based on stabilization mechanisms and risk controls, aiming to attract international players while ensuring resilience in the financial system. Despite 77 applications, only a handful of stablecoin licenses are expected to be approved initially.

Read more at Yahoo Finance: Hong Kong Moves Toward Looser Bank Standards for Crypto in Bid To Cement Regional Dominance