Guiding Insurance Capital to Crypto: Hong Kong Insurance Authority Proposes New Framework, Consultation in February 2026

To solidify its role as a global digital finance hub, Hong Kong’s Insurance Authority (IA) is drafting groundbreaking rules to channel insurance capital into cryptocurrencies and infrastructure projects—directing private funds toward government-priority sectors.

According to a Bloomberg report citing an internal briefing document, the IA plans to open a pathway for insurers to invest in virtual assets while maintaining strict risk controls.

(Sources: hk.epochtime)

Key Details of the Proposal

• 100% Risk Capital Charge for Crypto: Direct holdings of cryptocurrencies like Bitcoin or Ethereum would require full (100%) risk-based capital reserves under Hong Kong’s RBC regime—treating them as high-risk, capital-intensive assets.
• Preferential Treatment for Stablecoins: Risk charges aligned with underlying fiat currencies for regulated stablecoins, significantly lowering barriers for digital dollar usage in settlements or liquidity.
• Infrastructure Incentives: Capital relief for investments in Hong Kong or mainland China infrastructure, including Northern Metropolis development projects or locally listed/issued assets.
• Consultation Timeline: Proposal open for industry feedback now; formal public consultation February–April 2026, followed by Legislative Council review. Final rules could take effect mid-2026.

An IA spokesperson confirmed to Bloomberg that a review of risk-based capital rules is underway to support insurance sector growth and broader economy. Specific proposals will enter public consultation when ready.

Insurers are lobbying to broaden eligible infrastructure categories, viewing current options as limited.

Market Impact and Scale

As of mid-2025, Hong Kong has 158 authorized insurers with total 2024 premiums ~HK$635 billion (~$82 billion USD). Even modest allocations to crypto or infrastructure could inject substantial liquidity, boosting institutional demand and reshaping Asian digital asset pricing.

This dual approach—cautious crypto access paired with infrastructure incentives—balances Web3 ambitions with fiscal needs, positioning Hong Kong ahead in institutional adoption.