May 25, 2024
Hong Kong Greenlights First Spot Bitcoin ETF: Will Chinese Investors Follow?
Bitcoin ETF

Hong Kong Greenlights First Spot Bitcoin ETF: Will Chinese Investors Follow?

The Hong Kong SFC has approved the trading of spot Bitcoin and Ethereum ETFs, making Hong Kong the first jurisdiction to launch a spot Ethereum ETF.

This decision is a significant step forward in the digital asset investment field, positioning Hong Kong at the forefront of the industry.

Approvals for Leading Financial Companies

The SFC has approved several leading financial companies, including China Asset Management, Bosera Capital, and HashKey Capital Limited, to launch Bitcoin and Ethereum spot exchange-traded funds (ETFs).

These ETFs allow investors to directly purchase shares using Bitcoin and Ethereum, providing new opportunities for investors in the region.

Harvest Global Investments Receives Preliminary Approval

Harvest Global Investments has also received preliminary approval from the SFC to create additional Bitcoin and Ethereum digital asset spot ETFs. Han Tongli, CEO and CIO of Harvest International, commented on the approvals, stating:

“This time Harvest’s investment in two major digital asset spot ETF products has been approved in principle, which not only highlights Hong Kong’s competitive advantages in the field of digital assets but also demonstrates Harvest International’s drive to promote industry innovation and satisfaction.

This is a reflection of our continued leadership and innovation in the field of blockchain assets and AI investment.”

Regulatory Barriers for Mainland Chinese Investors

Mainland China’s ban on cryptocurrencies poses challenges for Hong Kong’s ETF market. Issuers in Hong Kong have confirmed that regulatory barriers prevent mainland Chinese funds from investing in these cryptocurrency-related ETFs.

Recent communications from ETF issuers in Hong Kong have clarified misunderstandings about the investment options available to Chinese investors through the Southbound Stock Connect program.

Hong Kong’s Efforts to Promote Digital Currencies

The Hong Kong Monetary Authority (HKMA) has been actively promoting the development of digital currencies as a mainstream medium of exchange since July of last year.

The HKMA has been encouraging local financial institutions to explore ways to serve the unique needs of crypto exchanges through regular meetings.

Key banks like HSBC and Standard Chartered have been essential in developing infrastructure to enable licensed crypto regulators to access banking services in Hong Kong easily.

Crypto companies such as OKX, Bybit, and Huobi, founded by entrepreneurs of Chinese descent, have also expressed their intentions to apply for new licensing opportunities.

Image: Wallpaperflare

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