Hong Kong regulators have announced their readiness to consider applications for OTC crypto ETFs. This follows a change in approach by the regulators, who since 2018 had been adopting a regulatory approach reserved for “professional investors”. This gradual opening-up of Hong Kong to cryptocurrencies reflects a change in regulators’ views on retail exposure to digital assets.
Towards Broader Investor Inclusion
Hong Kong’s significant turn towards crypto-currencies this year is confirmed with the relaxation of rules governing investor exposure to the digital asset market. Last October, the SFC updated its regulations to allow a wider range of investors to participate in the cryptocurrency and ETF markets. Last month, Julia Leung, CEO of the SFC, informed that the regulator was moving towards allowing retail investments in specialist ETFs, stressing that it would “welcome proposals using innovative technology to improve efficiency and customer experience”, provided that risks were kept under control.
The joint statement from the two regulators resonates with the rapidly changing landscape of virtual assets, now integrated into traditional finance. The SFC says it is “ready to accept applications for authorization from other funds with exposure to virtual assets, including ETFs specializing in cryptocurrency exchanges (spot VA ETFs).” This marks a new chapter in Hong Kong’s financial regulation and offers unprecedented opportunities for investors and market participants.
U.S. in sight: Bitcoin ETF likely to be approved
This announcement comes at a time when speculation surrounding the forthcoming approval of a Bitcoin ETF in the USA by the Securities and Exchange Commission (SEC) is reaching its peak. Should these speculations materialize, it could trigger a cascade of positive events for the entire cryptocurrency market.
There’s a bright future for the crypto ETF in Hong Kong. The opening of Hong Kong to crypto ETFs marks a crucial step in the evolution of global financial markets. Investors can now look forward to a broader diversification of their portfolios, while innovative companies find an opportunity to offer innovative solutions, aligned with the vision of the SFC and HKMA.
