The Hong Kong Monetary Authority (HKMA) has released a draft framework for classifying crypto assets, known as CRP-1 ‘Crypto Asset Classification,’ within the Banking Supervision Policy Manual. This draft seeks input from local banks on upcoming Basel Committee on Banking Supervision’s standards, which will come into effect in early 2026. The new regulations categorize crypto assets into two main groups: Group 1a for tokenized traditional assets and Group 1b for stablecoins with effective stabilization mechanisms. These categories are further divided into subgroups under the revised Hong Kong Banking (Capital) Rules. Group 1a includes tokenized traditional assets, while Group 1b comprises stablecoins with established methods of stabilization. Group 2 encompasses all crypto assets lacking reserve backing, such as Bitcoin and Ethereum, along with any tokenized traditional assets and stablecoins that do not meet the classification criteria. These are then subdivided into Group 2a (limited hedging recognition) and Group 2b (unrecognized hedging) based on specific hedging recognition criteria.