Hong Kong is set to take a leading position in the race to be the crypto investment hub for the Asia Pacific region following reports that it is set to approve its first bitcoin spot ETF later this month.
The move, as reported by Reuters, would make it the first domicile in the region to greenlight a crypto-based spot ETF, although the SFC has allowed crypto futures ETFs since late 2022.
It also comes at a time when Hong Kong’s funds market faces a number of challenges.
The restrictions imposed during the pandemic and the slowdown of the Chinese economy amid ongoing geopolitical tensions have all contributed.
According to Reuters, at least four firms from mainland China have applied to launch a spot bitcoin ETF – these include the Hong Kong arms of China Asset Management (CAM), Harvest Fund Management and Bosera Asset Management.
Hong Kong’s Securities and Futures Commission has this week granted approval to Harvest and CAM to provide virtual-asset related fund management services.
Hong Kong would be following in the footsteps of the US, which granted approval for the first spot bitcoin ETFs in January, albeit only as a result of legal cases brought by a number of crypto trading firms.
Those US ETFs have amassed more than $58 billion in assets so far and while Hong Kong’s investment market would get a boost from approved crypto spot ETFs, it is unlikely to match the growth of the US market.
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