Hong Kong Money Managers Receive Regulatory Nods for Cryptocurrency ETFs
Hong Kong has made a groundbreaking move in the world of cryptocurrency investment with the conditional approval of its first spot Bitcoin and Ether exchange-traded funds (ETFs) on Monday. This development not only signifies a major milestone for the city but also positions it as a frontrunner in embracing cryptocurrencies as mainstream investment tools within Asia.
Money managers, including the Hong Kong units of Harvest Fund Management, Bosera Asset Management, and China Asset Management, have all confirmed receiving conditional approvals from the Hong Kong Securities and Futures Commission (SFC) to launch these innovative ETFs. The regulatory process for such initiatives involves meeting various requirements such as fee payments, document submissions, and approval from the Hong Kong Stock Exchange (HKEX).
In a display of collaborative efforts and innovative partnerships, China Asset Management is teaming up with OSL and BOCI International to issue spot Bitcoin and Ether ETFs, with OSL serving as the primary virtual asset trading and sub-custodian partner. Additionally, Harvest Global Investments and Bosera Asset Management are working towards launching spot crypto ETFs in partnership with OSL and HashKey Capital, respectively.
Hong Kong’s proactive approach towards cryptocurrencies contrasts sharply with mainland China’s strict regulations. The city introduced a licensing regime for crypto trading platforms last year, allowing licensed exchanges to offer retail trading services. This regulatory environment has solidified Hong Kong’s position as a growing global digital asset hub, reinforcing its status as a prominent financial center.
The approval of Bitcoin spot ETFs in Hong Kong presents significant opportunities, particularly in tapping into the demand from mainland Chinese investors through the Southbound Stock Connect program. Estimates suggest that up to $25 billion in demand could be unlocked, with qualified mainland investors gaining access to eligible shares listed in Hong Kong. Matrixport, a Singapore-based crypto services provider, foresees a substantial influx of capital as mainland investors leverage the Southbound Connect program.
