Firms win approval to launch spot bitcoin, ether ETFs
Hong Kong on Monday gave initial approval to its first spot bitcoin and ether exchange-traded funds (ETFs), paving the way for the city to become Asia’s first to treat cryptocurrencies as a mainstream investment tool, according to fund managers. At least three offshore Chinese asset managers will launch the virtual asset spot ETFs soon. The local units of Harvest Fund Management and Bosera Asset Management said they had received conditional approvals from the Securities and Futures Commission (SFC), the city’s securities watchdog, to launch the ETFs. Meanwhile, the local unit of China Asset Management said it had received regulatory approval for the provision of virtual asset management services, and that it's actively deploying the spot bitcoin and ether ETFs. Emil Chan, co-chair of the Hong Kong Digital Finance Association, told RTHK that the move will boost the SAR's status as a financial centre. “There was an exodus earlier that many funds and talent moved from Hong Kong to Singapore because they were unclear about the regulatory status... this time, Hong Kong has moved fast to catch up in a short period of time,” he said. The fintech specialist also noted that traditional investors may be attracted to this market as the crypto ETFs allow them to utilise the traditional trading mechanism to access such assets without needing to worry about managing cryptocurrency keys and storage. The US launched its first ETFs to track spot bitcoin in January, drawing roughly US$12 billion in net flows. The city’s bourse may take about two weeks to prepare the funds to be offered, meaning the first set of spot ETFs could be available as early as this month. “The [approval] of the crypto ETFs sent a strong signal to the traditional securities trading markets and players that they have to move forward to look into crypto trading with a different perspective," Chan said. “In the past they considered crypto as unreal, but now it’s being sorted, and if its progress is solid, then it will boost transition and development of the virtual asset industry.” (Additional reporting by Reuters)