Hong Kong at the Start of the Crypto Revolution

Hong Kong at the Start of the Crypto Revolution: the First Spot Bitcoin ETF is Ready to Launch

The Hong Kong division of the Chinese investment company Harvest Fund Management has submitted an application for the creation of a spot bitcoin ETF to the Securities and Futures Commission (SFC) of Hong Kong. The information was disclosed in a Tencent News report.

According to the source, it will become known about the possible approval of the proposal after the end of the Lunar New Year celebrated in the region, which falls on February 15. It is expected that the SFC may make a decision similar to the American Securities and Exchange Commission (SEC), which preferred to approve several ETF products at the same time. At the moment, there are no other applicants in Hong Kong who want to launch similar bitcoin ETFs.

It is also known that about a dozen companies in Hong Kong are exploring the possibility of issuing spot bitcoin ETFs, as stated by HashKey's chief operating officer Livio Wen in January.

Exclusive sources also claim that the SFC is considering the possibility of redeeming shares of exchange-traded funds with cryptocurrency, which stands in sharp contrast to the US SEC, where such a procedure is allowed only in fiat currencies.

In addition, on September 29, Bloomberg reported on Harvest's interaction with RD Technologies and VSFG and consultations with the Monetary Authority of Hong Kong (HKMA) regarding stablecoins and their potential pilot projects.

Sean Lee, Senior Advisor and head of the stable Coins division at VSFG, expressed the expectation that HKMA will launch a regulatory sandbox in the first quarter of 2024. He also added that in the period 2023-2024, HKMA plans to introduce mandatory licensing for issuers of stablecoins and strengthen control over their management, issuance and communication with fiat currencies.

In November, the ForkLog portal reported that the SFC is considering providing retail investors with access to spot bitcoin ETFs, indicating a growing interest in regulating cryptocurrency financial instruments in the region.