Hong Kong’s top financial regulator is set to allow professional investors to trade crypto derivatives signaling a major step forward for the city’s virtual asset market. The Securities and Futures Commission plans to expand digital asset offerings according to a report by China Daily.

Crypto derivatives represent a much larger market than traditional spot trading. In the first quarter alone the market recorded $21 trillion in trading volume compared to just $4.6 trillion for spot trades based on data from TokenInsight. This move could unlock massive potential for the city to become a global crypto hub.

Industry leaders have welcomed the decision highlighting the long-standing demand for such regulation. Earlier this year Deribit’s chief commercial officer Jean-David Péquignot said Hong Kong was missing key rules on crypto derivatives. The city has also passed a bill to regulate stablecoins showing its commitment to building a secure and progressive crypto ecosystem.

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