Updated: February 2026
On February 10, 2026, at the Consensus Hong Kong conference, the Securities and Futures Commission (SFC) formally announced that licensed corporations may now accept Bitcoin (BTC) and Ethereum (ETH) as collateral for margin financing activities — a landmark step in integrating crypto assets into traditional securities financing arrangements in one of Asia’s leading financial centers.
The policy change, effective immediately for eligible intermediaries, allows BTC and ETH to be used as collateral in margin accounts for trading Hong Kong-listed securities, derivatives, and (subject to further conditions) over-the-counter leveraged products. This move is widely viewed as Hong Kong reinforcing its position as the most crypto-friendly major financial hub in Asia, following the 2023 licensing regime for virtual asset trading platforms and the 2025 stablecoin sandbox expansion.
Below is a complete 2026 guide: eligibility criteria, haircut schedule, operational requirements, expected impact on perpetual futures & leveraged trading, compliance considerations, and how traders on platforms like Tapbit can position around this regulatory tailwind.
Key Policy Details – SFC Circular February 2026
The SFC’s circular (Ref: 26EC12) sets out the following core rules:
| Item | Requirement / Detail |
|---|---|
| Eligible Collateral | Bitcoin (BTC) and Ethereum (ETH) only |
| Acceptable Platforms | Licensed VA trading platforms (Type 1 & 7 intermediaries under SFC) |
| Minimum Client Criteria | Professional investors only (PI status required) |
| Haircut – BTC | 50% (volatility-adjusted; reviewed quarterly) |
| Haircut – ETH | 60% (higher due to larger historical drawdowns) |
| Concentration Limit | Max 20% of total collateral value from crypto assets |
| Custody Requirement | Cold storage + qualified custodian (SFC-approved VA custodian or licensed bank) |
| Daily Valuation & Margin Call | Mark-to-market twice daily (0900 & 1700 HKT); 120% maintenance margin trigger |
| Implementation Deadline | Full compliance required by 30 June 2026 |
The SFC emphasized that this is **not** a blanket approval for retail margin trading of crypto itself — only BTC/ETH as collateral for traditional securities financing. Spot crypto margin trading remains prohibited for non-professional investors.
Why Now? SFC’s Strategic Rationale in 2026
The timing aligns with several converging trends:
- Post-Consensus momentum — Hong Kong hosted Consensus 2026 (Feb 4–6), where global regulators and institutions discussed tokenized RWAs and institutional DeFi
- Mainland China shadow policy — Beijing continues to tolerate Hong Kong as a crypto sandbox while maintaining strict domestic controls
- Stablecoin & RWA leadership — SFC wants to capture tokenized securities issuance and settlement volume before Singapore or Dubai pull ahead
- US regulatory contrast — While US SEC remains restrictive on crypto collateral, Hong Kong is positioning itself as the “Asia gateway” for compliant crypto finance
Industry response has been positive but cautious: several licensed VA platforms (OSL, HashKey, HKVAX) have already applied for margin collateral amendments; international brokers with Hong Kong subsidiaries are accelerating compliance reviews.
Impact on Perpetual Futures & Leveraged Trading
The new collateral rules do not directly allow margin trading of BTC/ETH spot or derivatives for retail clients — that remains prohibited under the existing SFC regime for non-professional investors. However, the policy creates several indirect tailwinds:
- Institutional margin financing → Professional investors can now use BTC/ETH holdings to finance leveraged positions in Hong Kong-listed equities, ETFs, or warrants
- Cross-margin potential → Licensed brokers may develop hybrid products linking crypto collateral to traditional margin accounts (subject to further SFC approval)
- Liquidity flywheel → Increased institutional participation in Hong Kong crypto markets → deeper order books → tighter spreads on BTC/ETH pairs
- Perpetuals boost → Platforms offering crypto perps (including offshore venues accessible to Hong Kong residents) may see higher volumes from hedged institutional flows
For retail traders on platforms like Tapbit, the real benefit is **regulatory tailwinds**: Hong Kong’s progressive stance increases overall market legitimacy → attracts more institutional liquidity → reduces volatility in BTC/ETH pairs over time.
Risks & Compliance Considerations for Traders
Important limitations and risks remain:
- Retail prohibition — Ordinary investors cannot use crypto as margin collateral or trade leveraged crypto products on SFC-licensed platforms
- Haircut drag — 50–60% haircut means only half (or less) of crypto value can actually be used as buying power
- Volatility margin calls — Sharp BTC/ETH drawdowns trigger twice-daily margin calls; failure to meet calls results in forced liquidation
- Regulatory reversibility — SFC has history of tightening rules after pilot phases (e.g. 2024 retail investor restrictions)
- Tax & AML — All collateral usage must comply with Hong Kong AML/CTF rules; gains may be subject to profits tax if deemed trading income
Tapbit Trading Implications & Positioning Ideas – February 2026
- Sign Up on Tapbit (0% maker fees)
- Deposit USDT via bank transfer / P2P
- Regulatory tailwind play: Long BTC/USDT or ETH/USDT spot on pullbacks — Hong Kong policy momentum supports long-term institutional flows
- Volatility hedge: Use 20–50x BTC perpetuals to capture post-announcement pumps (isolated margin)
- Stable parking: Move to USDT Earn yields during consolidation or macro fear
- Risk control: Max 1–2% account risk per trade; trailing stops below recent swing lows
FAQs – Hong Kong SFC Bitcoin & Ethereum Margin Collateral Policy (2026)
Can retail investors in Hong Kong use Bitcoin as margin collateral?
No — the SFC policy is restricted to professional investors only. Retail clients remain prohibited from crypto margin trading on licensed platforms.
What haircut applies to BTC and ETH collateral?
BTC: 50% haircut; ETH: 60% haircut. This means only 50% (BTC) or 40% (ETH) of the crypto value can be used as effective buying power.
When does the new collateral policy take effect?
Effective immediately (February 2026) for eligible intermediaries that update their internal controls and receive SFC approval. Full industry compliance required by 30 June 2026.
How does this affect perpetual futures trading?
Indirectly bullish — increased institutional legitimacy and liquidity in Hong Kong crypto markets should tighten spreads and reduce volatility over time. Retail perps remain available on offshore platforms like Tapbit.
Conclusion & 2026 Outlook
The SFC’s decision to permit Bitcoin and Ethereum as margin collateral for professional investors marks another significant step in Hong Kong’s ambition to become Asia’s leading compliant crypto & virtual asset hub. While retail access remains restricted, the policy creates powerful tailwinds for institutional participation, deeper market liquidity, and long-term price support for BTC and ETH.
For traders on Tapbit, the real edge lies in execution: zero maker/taker fees on BTC/USDT & ETH/USDT spot & perpetuals, deep liquidity, up to 125x leverage (use conservatively), flexible Earn yields, and instant JPY/USDT P2P ramps. Monitor upcoming SFC circulars on implementation details, licensed intermediary applications, and any test cases involving tokenized RWAs — Hong Kong’s regulatory momentum remains one of the clearest institutional tailwinds in global crypto markets for 2026.
Trade BTC & ETH momentum responsibly on Tapbit:
- Sign Up on Tapbit (0% maker fees)
- Login & Deposit JPY/USDT
- Live BTC/USDT & ETH/USDT Charts
Disclaimer: Cryptocurrency trading involves significant risk of loss. Prices are highly volatile and can change rapidly. Regulatory policies and implementation details are subject to change. This article is for informational purposes only and does not constitute investment, legal or financial advice. Always conduct your own research (DYOR) and consult qualified professionals before making decisions.
