Crypto exchanges in Hong Kong prepare for launching spot Bitcoin ETFs as regulators pave the way for these investment products.
Gary Tiu, Executive Director and Head of Regulatory Affairs at OSL, a Hong Kong-licensed cryptocurrency exchange, has suggested that the region could witness the introduction of its inaugural spot crypto exchange-traded funds (ETFs) by the middle of this year.
Tiu also indicated that OSL is actively engaged in discussions with numerous fund companies, with five to ten firms currently exploring the possibility of launching such ETFs. Notably, around five of these companies have progressed faster in their endeavors, raising the prospect of Hong Kong’s first spot crypto ETFs hitting the market by mid-2024.
Tiu further emphasized the need to maintain reasonable fees in collaboration with fund companies, considering the limited number of licensed crypto exchanges in the city, currently standing at two. He also noted the numerous benefits associated with ETFs, including fostering orderly markets for underlying digital assets, establishing a model for local investor protection, and facilitating the integration between regulated digital asset platforms and traditional financial institutions.
This announcement follows similar sentiments expressed by HashKey, another licensed crypto exchange in Hong Kong, which disclosed earlier this month its ongoing discussions with asset managers regarding potential spot crypto ETF launches. Livio Weng, Chief Operating Officer of HashKey, also revealed that around ten fund companies are exploring the possibility of launching such ETFs in the city.
Adding to the momentum, Venture Smart Financial Holdings Ltd, a Hong Kong-based financial services firm, recently outlined plans to potentially introduce a spot bitcoin ETF in the first quarter of this year. The firm aims to grow the potential ETF to reach $500 million in assets under management by the end of 2024, as reported by Bloomberg.
Hong Kong Regulators Pave the Way for Spot Crypto ETFs
Hong Kong is gearing up to welcome spot crypto exchange-traded funds (ETFs), following a December announcement by the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority, the city’s de facto central bank. Both regulatory bodies revealed a review of their existing policies and released two circulars outlining the prerequisites for spot crypto ETFs.
In its December circular, the SFC highlighted that transactions involving cryptocurrencies within spot crypto ETFs shall happen through platforms licensed by the SFC or authorized financial institutions.
Presently, Hong Kong boasts several futures-based crypto ETFs, including the Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF. The move to accommodate spot crypto ETFs aligns with the region’s commitment to adapting regulatory frameworks to accommodate the evolving landscape of digital assets and cater to investor demand for diversified investment products.