The Hong Kong Insurance Authority (HKIA) has introduced a new legal framework that permits the city's 158 licensed insurance companies to invest their significant capital in cryptocurrencies and infrastructure projects.
This proposal, outlined in the regulator's presentation on December 22, 2025, marks a historic transition towards directing private insurance capital—totalling around $82bn in premium revenue last year—into sectors prioritised by the government. By establishing a formal pathway for incorporating 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 stringent 100% risk-based capital requirement for directly holding cryptocurrencies. According to the city's Risk-Based Capital (RBC) regime, insurance companies must maintain an equivalent dollar in working capital as a reserve for every dollar of Bitcoin or Ethereum they hold. 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.
In contrast, stablecoins are anticipated to receive more favourable treatment; investments in stablecoins that are regulated in Hong Kong will incur risk fees based on the specific fiat currencies to which they are pegged. This adjustment significantly lowers the barriers for insurance companies looking to utilise digital dollars for payments or liquidity management.
The HKIA emphasised that 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, allowing insurance companies and stakeholders to provide input on risk weighting and the types of eligible projects.