Hong Kong’s financial regulator is set to approve the first batch of bitcoin spot ETFs, marking a significant milestone for the region. This development would establish Hong Kong as the first locality in the Asia-Pacific to authorize a crypto-backed, exchange-based investment fund, positioning it as a key player in the race to become a hub for digital assets in the area.
According to a Reuters report, the Securities and Futures Commission (SFC) is expected to grant this approval later this month. So far, there have been four applications from firms based in mainland China, including Harvest Fund Management, China Asset Management, and Bosera Asset Management. The SFC has already authorized Harvest and China Asset Management (CAM) to offer virtual-asset-related fund management services.
By approving these crypto ETF applications, Hong Kong will follow the United States, which granted the first spot bitcoin ETFs in January, largely influenced by legal actions taken by various crypto trading firms. The US ETFs have since garnered over $58 billion in assets.
However, while Hong Kong’s funds market may not see the same level of investment, the approvals are expected to stimulate interest amidst economic challenges in China and the residual effects of the pandemic, including strict travel restrictions that have made it difficult for asset managers in Hong Kong to attract and retain talent.