Hong Kong is preparing to approve Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) this Monday, a significant milestone for the cryptocurrency industry that highlights the city’s strategy to integrate them into its financial system.
As reported by Bloomberg, the Securities and Futures Commission (SFC) of Hong Kong is expected to approve these spot cryptocurrency ETFs by the end of this month, pending final details with Hong Kong Exchanges and Clearing Limited, a publicly traded holding company.
According to Bloomberg, it is expected that two companies – Chinese asset manager Harvest Fund Management and a partnership between Bosera Asset Management and HashKey Capital – will succeed in getting regulators to approve the funds.
This measure would boost cryptocurrencies in the city, as traditional financial institutions and investors seek more conventional structures to capitalize on this growing asset class, as Bitcoin has risen by around 60% so far this year, surpassing $70,000.
Hong Kong is one of the leading ETF markets in the Asia-Pacific region, offering a relatively diverse range of products and a large pool of liquidity, attracting prominent issuers, market makers, and international investors.
As a gateway to mainland China and a regional connector in the Asia-Pacific, and with its attractive legal, tax, and regulatory framework, Hong Kong is now positioning itself as a hub for these funds market.
The city has progressed in its regulatory regime for virtual asset service providers since June 2023, granting approvals to platforms operated by HashKey Group and Digital Asset Securities OSL.
The city’s regulators have already approved the launch of cryptocurrency ETFs based on futures, and among the three listed products, CSOP Bitcoin Futures, CSOP Ether Futures, and Samsung Bitcoin Futures, the combined assets reach approximately $170 million, according to Bloomberg.
These new authorizations are expected to provide a boost in the face of challenges posed by the economic slowdown in China and the aftermath of the pandemic, particularly the strict travel restrictions that made it difficult for Hong Kong asset managers to attract and retain qualified personnel.
