Hong Kong on Monday approved the applications of several spot exchange-traded funds for bitcoin and ether, as the region continues its efforts to become a regional crypto hub.
China Asset Management, a leading Chinese asset manager, said that its Hong Kong unit has received approval in principle from the Hong Kong Securities and Futures Commission to offer retail asset management services linked to spot crypto ETFs. It plans to issue Bitcoin and Ether spot ETFs in collaboration with OSL and BOCI International. OSL said it will act as China Asset Management’s “first virtual asset trading partner and sub-custodian” for upcoming ETFs.
Harvest Global Investments’ two spot crypto ETFs have also received approval in principle from the SFC, the company. said in a report. He added that both ETFs will be issued in collaboration with OSL, which could effectively address issues such as excessively high margin requirements. “In this collaboration, OSL leverages its robust infrastructure to provide a secure trading environment essential to the operation of the ETF, managing the underlying assets with precision and reliability,” OSL said in a statement. statement.
Bosera Asset Management, a Hong Kong unit of a major Chinese asset manager, and HashKey Capital also told The Block on Monday that the regulator had given conditional approval to two spot crypto ETFs jointly managed by the pair. The two men did not immediately clarify what the “conditional approval” entailed.
Bosera and HashKey told The Block that the two will work together to launch a spot bitcoin ETF, the Bosera HashKey. Bitcoin BTC
-1.78%
ETF, and a spot ether ETF, the Bosera HashKey Ether ETF. Both ETFs are expected to allow investors to directly subscribe to ETF shares using Bitcoin and Ether. They did not disclose the launch schedule.
“The introduction of Virtual Asset Spot ETFs not only provides investors with new asset allocation opportunities, but also strengthens Hong Kong’s status as an international financial center and virtual asset hub,” Bosera said in a statement.
In contrast to its neighbor China’s broader crackdown on cryptocurrency trading and mining, Hong Kong rolled out the welcome mat for crypto companies last year. In June 2023, Hong Kong officially launched its crypto licensing regime for crypto trading platforms, allowing licensed exchanges to offer retail trading services. Hong Kong has licensed two platforms: HashKey and OSL.
The SFC did not immediately respond to The Block’s request for additional comment.
Ether ETF
Adrian Wang, chief executive of Asia-based digital asset management firm Metalpha, told The Block that upcoming ether spot ETFs could gain a lot of traction.
“I think 
ETH
-4.90%
The ETF could be more influential and larger than the bitcoin ETF because investors have the opportunity to gain exposure to bitcoin with bitcoin-related stocks like mining companies, but there are no bitcoin-related stocks. ETH at the moment,” Wang said.
“Hong Kong’s approval of spot Ether ETFs precedes a US decision and is an important step in Hong Kong’s journey to becoming a leading crypto hub,” said Angela Ang, former regulator of the Monetary Authority of Singapore and Senior Policy Advisor. at blockchain intelligence company TRM Labs. “With fewer alternatives for exposure to Ethereum, we could see Ether ETFs attract more investor interest.”
Patricia Ho, general counsel of Scroll, an Ethereum Layer 2 network, said Hong Kong had overtaken the United States as the first global financial center to allow spot ether ETFs. “I believe this will unlock pent-up interest from global investors and encourage more funds to be created to issue Hong Kong Ether spot ETFs.”
(Updates: Added comments from Wang, Ang and Ho, plus more details on upcoming ETFs.)
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