Hong Kong should soon follow USA'make enter spot cryptocurrency exchange-traded fund authorization (ETF), reinforcing the city's ambition to become a major virtual asset center in Asiaaccording to industry experts.
While the city Securities and Futures Commission (SFC) said in December that it was willing to authorize retail access to spot virtual asset ETFsthe actual launch of such products is already lagging behind that of the US, according to Wang Yi, head of quantitative investing at CSOP Asset Management, which currently manages two cryptocurrency Futures ETFs.
US Listed Place bitcoin ETFs saw $4.6 billion worth of shares traded on Thursday, according to a Reuters report that cited LSEG data, such as Investors flocked to flagship products. approved by the US securities regulator on Wednesday.
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Eleven spot bitcoin ETFs, including BlackRock's iShares Bitcoin Trust, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF, among others, began trading on Thursday, following the Historic approval from the US Securities and Exchange Commission This is expected to help bring the cryptocurrency industry closer to the more regulated world of traditional finance.
Blackrock representatives ring the opening bell with guests at the Nasdaq MarketSite in New York on January 11, 2024, when spot bitcoin exchange-traded funds began trading. Photo: Bloomberg alt=Blackrock representatives ring the opening bell with guests at the Nasdaq MarketSite in New York on January 11, 2024, as spot bitcoin exchange-traded funds began trading. Photo: Bloomberg>
The successful U.S. launch of spot bitcoin ETFs is expected to help move Hong Kong regulators closer to authorizing similar cryptocurrency funds to operate in the city.
Crypto spot ETFs allow investors to gain exposure to virtual assets without directly purchasing any crypto tokens.
These funds โgive more legitimacy to the crypto industry and also open up more opportunities for collaboration with major finance,โ said RJ Ke, a researcher at Taiko, an ethereum scaling startup. "Hong Kong likely to accelerate bitcoin ETF filings in coming months."
About 10 fund management companies are preparing to launch spot virtual asset-backed ETFs in Hong Kong, according to Chinese media outlet Caixin's Wednesday interview with Livio Weng, chief operating officer of cryptocurrency trading app operator HashKey Group. Weng said as many as eight companies were in an "advanced stage" of launch.
Bitcoin jumped about 3.4 percent to $47,500, following approvals of spot crypto ETFs in the United States. That was almost three times the level the original cryptocurrency reached in November 2022, when Failed cryptocurrency exchange FTX filed for bankruptcy to send the price of bitcoin below $17,000.
Hong Kong needs to launch spot virtual asset ETFs as soon as possible to โensure the city remains competitive in the global cryptocurrency market and strengthen its position as a global financial center,โ said Mao Shixing, also known as โDiscus Fish,โ who is the co-founder and CEO of digital asset custody solutions provider Cobo.
Mao said the U.S. approvals could affect other jurisdictions because "the SEC is one of the most influential and reputable financial regulators in the world," adding that the agency's initiatives "often serve as important references for financial regulators in other countries." countries and regions".
"However, each country and region has its own independent stance and regulatory objectives," he said.
Donald Day, chief operating officer of digital asset platform VDX, echoing the Cobo boss's view, said the SEC's decision would cause his peers to "seriously consider whether similar ETFs would be permissible and desirable."
Day noted that the SFC's statement in December about being prepared to authorize such funds "has in principle opened a path for issuers to launch spot crypto ETFs in Hong Kong."
With the United States, there are now nine markets around the world that have allowed spot crypto ETF trading. The other markets include Canada, Germany, Swissand tax havens such as the Cayman Islands in the Caribbean and Jersey off the coast of northwestern France, according to market analysis firm CoinGecko.
However, mainland China is unlikely to follow suit.
In December, China's Ministry of Industry and Information Technology said that write a national Web3 development plan to adapt to the needs of the country. But the announcement made no mention of cryptocurrencies even though Beijing maintains its support for Hong Kong's ambition to become a major virtual asset hub.
The Chinese government banned banks from handling bitcoin in 2013 and forced cryptocurrency exchanges to move abroad in 2017. In 2021, the country's regulators reiterated the state's ban on all financial institutions engaging in cryptocurrency-related activities.
China's state media recently emphasized the risks involved with spot cryptocurrency ETFs.
US approval of spot bitcoin ETFs "would make the cryptocurrency market even more frenetic, providing fertile ground for illegal transactions such as money laundering," according to a report in International Financial News, a People's Daily newspaper. , which quotes Shanghai Jiao Li Nan, assistant professor at Tong University.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, explore the SCMP application or visit the SCMP Facebook and Twitter pages. Copyright ยฉ 2024 South China Morning Post Publishers Ltd. All rights reserved.
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