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Tuesday, January 30, 2024

Financial Firms Vie to Launch Hong Kong’s First Spot Crypto ETF

Major financial institutions in Hong Kong have set their sights on launching spot bitcoin exchange-traded funds ↗ (ETFs), with Harvest Global Investments applying to the Securities and Futures Commission (SFC). Venture Smart Financial Holdings also plans to file an application soon.

Additionally, Harvest Global, Venture Smart, and RD Technologies are in talks with the Hong Kong Monetary Authority (HKMA) ↗ regarding participating in a stablecoin sandbox to issue fiat-pegged stablecoins under a proposed licensing regime.


TLDR

  • Harvest Global Investments applied for a spot bitcoin ETF with Hong Kong’s Securities and Futures Commission (SFC)
  • Venture Smart Financial Holdings also plans to apply for a spot bitcoin ETF in Hong Kong, hoping to launch in Q1 2024
  • Harvest Global, Venture Smart, and RD Technologies are in discussions with Hong Kong Monetary Authority (HKMA) about participating in the planned stablecoin sandbox
  • HKMA and SFC published proposals to regulate stablecoin issuers through a licensing regime
  • Harvest Hong Kong submitted the first application for a spot bitcoin ETF to SFC on January 26th

These developments represent a shifting regulatory environment in Hong Kong that could allow greater integration of cryptocurrencies into mainstream finance. With other major Asian financial hubs like Singapore also making strides around crypto regulation, Hong Kong appears intent on not falling behind.

Harvest Global took the first step toward spot bitcoin ETFs on January 26th by filing with the SFC. The ETFs could begin trading after the Chinese New Year on February 10th if quickly approved. Venture Smart expects to file shortly as well, hoping to launch an ETF in Q1. The ETFs would provide an easier way for both institutional and retail investors to gain exposure to bitcoin.

The push for spot bitcoin ETFs comes right after regulators indicated their openness to applications last month. The stringent requirements around custody and trading may limit the number of firms able to participate initially. However, those able to meet the standards could tap into substantial demand for crypto investment vehicles in Hong Kong.

In addition to ETFs, select firms are discussing the planned stablecoin sandbox with HKMA. The sandbox aims to enable regulated issuance of fiat-pegged stablecoins, providing guardrails around these coins tied to HKD or USD. Firms participating would need to comply with licensing oversight on reserves, redemption rights, clearing, and settlement.

By pursuing both spot bitcoin ETFs and stablecoin regulation, Hong Kong seeks to balance innovation and responsible oversight in the cryptocurrency sector. These accommodative steps could strengthen Hong Kong’s standing as an Asian hub for global finance.

Oliver Dale ↗

Editor-in-Chief of Blockonomi and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all.
His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. Contact [email protected]

Kaylie Pferten
Kaylie Pferten
A pilot of submersible crafts in a former life, now married to my husband David and writing about investment advice.

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