Core Viewpoint - Hong Kong's insurance regulator is considering a new capital framework that would allow insurers to invest in cryptocurrencies while imposing stringent risk charges to mitigate market volatility and risk [1][3]. Group 1: Capital Framework Proposal - The Hong Kong Insurance Authority (IA) plans to apply a 100% risk charge to insurers' exposure to crypto assets, requiring full capital backing for any crypto holdings [3]. - The proposal aims to channel insurance capital into assets that align with government priorities, such as infrastructure projects, while limiting crypto exposure to insurers with robust balance sheets [5]. Group 2: Treatment of Stablecoins - Stablecoins will be treated differently, with risk charges linked to the fiat currency backing each token, provided they are regulated within Hong Kong [4]. - This approach indicates a clear distinction between unbacked crypto assets and stablecoins designed to maintain price stability [4]. Group 3: Regulatory Context and Future Steps - The draft framework is subject to revision and is expected to undergo public consultation between February and April, followed by legislative consideration [6]. - The initiative aligns with Hong Kong's efforts to establish itself as a regional hub for digital assets, including licensing regimes for virtual asset trading platforms and regulations for stablecoin issuers [7].