Hong Kong Monetary Authority Tweaks Crypto Asset Classification Framework

The Hong Kong Monetary Authority just updated its crypto asset classification guidelines. They revised the CRP-1 module in their Banking Supervision Policy Manual. It kicks in early 2025. This builds on Basel Committee standards from earlier this year.

Their new system splits crypto assets into categories. Kind of interesting how they did it.

Group 1a holds tokenized traditional assets meeting certain requirements. Group 1b? Stablecoins with decent stabilization mechanisms and reserves. Group 2 lumps together everything else—Bitcoin, Ethereum, and any tokenized assets that don’t make the cut. They further divide these into 2a (limited hedging recognition) and 2b (no hedging recognition).

Hong Kong’s standing in the global crypto world seems stronger now. Investors feel more confident. Banks can navigate crypto exposure better. It’s not entirely clear how this will play out long-term.

The city appears to be carving out its identity as a financial hub that embraces innovation while keeping an eye on things. Smart move? Time will tell.