The Hong Kong Monetary Authority (HKMA) has released a draft concerning crypto asset classification, aligned with Basel Committee standards and set to be implemented in early 2026.
Classification of Crypto Assets by Groups
The classification draft divides crypto assets into four groups: 1a, 1b, 2a, and 2b. Groups 1a and 1b include traditional and stable tokenized assets, while groups 2a and 2b encompass more volatile unbacked assets like Bitcoin and Ethereum. This framework will assist banks in determining their asset holdings and assessing stability measures.
Impact on Bank Capital
The classification of crypto assets will influence future capital requirements for banks. This could change market dynamics and institutional participation in digital asset markets. As noted by Arthur Hayes, Co-Founder of BitMEX, "Hong Kong's approach to crypto regulation will influence how institutions view and handle these assets going forward."
Bitcoin Market Amid Regulatory Changes
According to CoinMarketCap, the current market value of Bitcoin (BTC) is $113,953.17, with a market cap of $2.27 trillion. Over the past 90 days, Bitcoin's price surged by 8.74%, despite a 3.63% slip in the last month. Regulatory initiatives may catalyze structured stability in the crypto market.
The classification proposed by the Hong Kong Monetary Authority may lead to new standards for banking participation in digital assets, potentially supporting innovation in tokenized asset sectors.
