Hong Kong Approves Bitcoin and Ethereum ETFs

This month, Hong Kong regulators gave the green light for the launch of spot Bitcoin and Ethereum exchange-traded funds (ETFs), following similar initiatives in the U.S. earlier this year. According to asset managers, three ETF providers received approval from Hong Kong’s Securities and Futures Commission (SFC).

ChinaAMC announced it had secured regulatory approval to offer “virtual asset management services” and is in the process of developing a spot Bitcoin and Ethereum ETF. OSL Digital Securities has been designated as the custodian for ChinaAMC.

Additionally, Harvest Global and Bosera International have also obtained SFC approval for their Bitcoin and Ethereum ETFs.

While approval has been granted, these ETFs have not yet been launched. Crypto trading remains largely prohibited in mainland China following a significant crackdown in 2021. Despite this, Hong Kong is gradually positioning itself as a regulated cryptocurrency hub, aiming to compete with locations like Dubai and Singapore. It remains to be seen whether mainland Chinese investors will be permitted to invest in cryptocurrencies through these ETFs.

This development follows the U.S. securities regulators’ recent approval of spot bitcoin ETFs, which have attracted billions of dollars in inflows. A Bitcoin ETF provides investors exposure to the asset’s price movements without the necessity of owning the underlying cryptocurrency, potentially allowing more traditional investors to participate in the crypto market.

Hong Kong is poised to be among the first jurisdictions globally to approve an Ethereum ETF, a step not yet taken by the U.S. Securities and Exchange Commission.

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