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Hong Kong Poised to Greenlight First Spot Bitcoin and Ethereum ETFs by Monday: Reports


Hong Kong might approve its first spot Bitcoin and Ethereum exchange-traded funds (ETFs), potentially marking a significant advancement in the city’s pursuit to become a global crypto hub.

According to Bloomberg, sources close to the matter indicate that the Securities and Futures Commission (SFC) may grant approval as early as Monday. However, this decision might be subject to last-minute changes.

Which Issuers Are Likely Recipients of Hong Kong Bitcoin ETF Approvals

The likely recipients of these approvals are notable firms in the asset management industry. An international division of Harvest Fund Management, alongside a joint venture between Bosera Asset Management (International) and HashKey Capital, is expected to secure permissions to launch these spot-crypto ETFs.

Pending regulatory approval and final discussions with Hong Kong Exchanges & Clearing Ltd., both plan to debut the ETFs by month-end.

Following recent regulatory approvals, these developments highlight Hong Kong’s aggressive approach to integrating cryptocurrencies into its financial systems. Earlier in April, the SFC authorized Harvest and China Asset Management to manage funds related to virtual assets.

The introduction of spot ETFs in Hong Kong reflects the significant success of similar products in the United States. Since launching in January, US spot Bitcoin ETFs have attracted approximately $59 billion in assets. This influx has significantly boosted Bitcoin’s value, demonstrating the potential impact of Hong Kong’s new ETFs.

Despite its forward-thinking regulations, Hong Kong faces stiff competition from cities like Singapore and Dubai, which are also keen to dominate the crypto market.

However, some industry leaders criticize Hong Kong’s regulatory framework as too restrictive. They argue that it could hinder global investor participation and limit market expansion.

For example, Livio Weng, CEO of HashKey Exchange, has voiced concerns that the new regulations might impede the influx of global users. He fears that the restrictive policies could stifle the market’s potential growth in Hong Kong. This issue is exacerbated by the limited number of available licenses, which has made them highly prized yet controversial.

“So this blocks a lot of global users from coming to Hong Kong,” Weng said.

Nevertheless, the anticipation for the approval of spot Bitcoin ETFs is building. Analysts suggest that these ETFs could draw significant investment and solidify Hong Kong’s status as a safe and regulated environment for cryptocurrency trading. As the decision day nears, stakeholders are keenly awaiting the SFC’s verdict.

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Conclusion

In conclusion, Hong Kong’s potential approval of its first spot Bitcoin and Ethereum exchange-traded funds (ETFs) represents a significant step toward establishing itself as a global crypto hub. The anticipated approval from the Securities and Futures Commission (SFC) could further solidify Hong Kong’s position in the cryptocurrency market. Despite facing competition from cities like Singapore and Dubai, the approval of these ETFs could attract significant investment and enhance Hong Kong’s reputation as a safe and regulated environment for crypto trading. However, concerns about the restrictive regulatory framework and limited licenses remain, potentially impacting global user participation and market expansion in Hong Kong’s crypto sector.

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