Hong Kong is preparing to unlock a multi-billion-dollar pool of capital for digital assets and related infrastructure, a move that could mark a pivotal moment for institutional cryptocurrency adoption in Asia.

The Hong Kong Insurance Authority (IA) is proposing new rules that would allow the city’s 158 authorized insurers to invest in a range of assets, including cryptocurrencies, according to a Dec. 4 presentation seen by Bloomberg.

While the proposal signals a cautious opening toward crypto, regulators are maintaining a conservative risk framework. Under the plan, insurers would be required to hold one dollar in reserve for every dollar invested in crypto, effectively imposing a 100% “risk charge” on direct cryptocurrency holdings to buffer against their notorious volatility.

Stablecoins would face lower risk charges tied to the fiat currency they are pegged to, the report added. The Hong Kong Monetary Authority is expected to issue its first stablecoin licenses in early 2026.

The Insurance Authority plans to open the proposal for public consultation from February through April 2025, with legislative submissions expected later in the year, giving the industry its first formal opportunity to review the rules.