The Insurance (Valuation and Capital) (Amendment) Rules 2026 were gazetted on 22 May 2026 and tabled in the Legislative Council on 27 May for negative vetting. Among other changes, they update the capital treatment of crypto assets and specified stablecoins under the risk-based capital regime for insurers. The amendments take effect on 31 December 2026.
Why it matters: Hong Kong insurers get a defined way to hold crypto: full capital against volatile tokens, and close to the treatment of the underlying currency for stablecoins from licensed issuers. R.M.
For Ethereum: Ether held by an insurer would need capital equal to its full value, while a licensed stablecoin such as HKDAP, issued on Ethereum mainnet, would be charged as the Hong Kong dollar it references plus counterparty risk on the issuer.
The amendments came out of the Insurance Authority’s (IA) review of the risk-based capital (RBC) regime, which has applied to Hong Kong insurers since 1 July 2024. The IA consulted on the draft rules from 11 February to 10 March 2026 and published its conclusions on 8 May. Most of the package is about infrastructure investment. The crypto provisions are technical amendments, set out in the paper to the Legislative Council (LegCo) Panel on Financial Affairs (Annex, paras 5 to 7):
Specified stablecoins, meaning stablecoins under the Stablecoins Ordinance (Cap. 656), get a “look-through approach”. The capital requirement follows the asset the stablecoin references, with an added charge for counterparty default risk (para 5).
Crypto assets, as defined in rule 8(8) of the Insurance (Valuation and Capital) Rules, currently count as intangible assets with no value and are left out of the capital base. Under the amendments they count towards capital, and the risk capital amount is set by applying a 100% downward stress, with no diversification against other risk modules (para 6).
A new “Other Risk” module holds crypto exposures apart from the traditional modules (para 7).
The IA cites the Banking (Capital) (Amendment) Rules 2025 and the EU’s Solvency II technical advice on cryptoassets as precedents (footnote 14).
Implications
An insurer can now hold crypto without writing it off, but every dollar of a volatile token has to be matched by a dollar of capital. That makes direct holdings expensive and will keep them small. The rule’s main effect is to make the position clear for boards and auditors, not to encourage holdings.
Stablecoins are where it opens a door. A licensed Hong Kong dollar stablecoin held by an insurer would be charged roughly as Hong Kong dollar cash plus issuer risk, which makes it usable for treasury and settlement. The paper doesn’t say how an unlicensed stablecoin is treated. The likely reading is that it falls under “crypto assets” and takes the 100% stress, but the rule 8(8) definition isn’t quoted, so that is not confirmed.
For Ethereum
HKDAP, the first licensed issuer’s stablecoin, runs on Ethereum mainnet. An insurer holding it would get look-through treatment. Holding ether itself, or a widely used offshore stablecoin, would most likely cost capital equal to its full value. The rules don’t mention staking or tokenised securities on public chains.
Elsewhere in Asia
The IA ties the 100% charge to the bank capital rules Hong Kong amended in 2025. Singapore is consulting on whether some tokens on permissionless chains can get lighter bank treatment. Neither Singapore nor India has published crypto capital rules for insurers.
What to watch
The end of negative vetting in LegCo, and the commencement on 31 December 2026. After that, the first insurer returns to report stablecoin or crypto holdings under the new module.