In January this year, after a decade of discussion, the U.S. Securities and Exchange Commission (SEC) finally approved the listing of Bitcoin spot ETFs, which became a milestone in the industry. SEC Chairman Gary Gensler said: "This is a watershed for the world's largest cryptocurrency and the broader crypto industry."
Following the listing of the first 11 Bitcoin spot ETFs in the United States, financial institutions in Hong Kong are also accelerating the layout of virtual asset spot ETFs. At the beginning of this year, Harvest Fund's subsidiary Harvest International submitted a Bitcoin spot ETF application to the Hong Kong Securities Regulatory Commission, which finally made the latest progress.
On April 10, the Hong Kong Securities Regulatory Commission updated the list of fund companies managing virtual assets on its official website, adding Harvest International and China Asset Management (Hong Kong), which means that these public funds have added virtual asset management business to their original traditional asset management business. This is also the first time that the Hong Kong subsidiary of China's leading fund company has been approved.
According to Tencent Finance, the Hong Kong Securities and Futures Commission will approve the first batch of Bitcoin spot ETFs on April 15. The Hong Kong Stock Exchange will need about 2 weeks to prepare for product listing and other matters. However, the entire Bitcoin spot ETF project has been communicated and planned in detail with the Hong Kong Stock Exchange in advance. The Hong Kong Securities and Futures Commission originally planned to list the Bitcoin spot ETF in Hong Kong around April 25, no later than the end of April.
Once listed, ordinary retail investors can also make Bitcoin-linked investments by subscribing to such ETFs. In the current situation of inactive Hong Kong stock trading and low liquidity, such assets can be said to provide ordinary retail investors with alternative investment channels.
In the rising virtual asset development ecosystem, Huobi Global's website shows that the price of Bitcoin has achieved a 200% increase in the past year, and the rising asset scale has also made the trading and management value of this asset increasingly valued. The listing of Bitcoin spot ETF marks a new stage for virtual assets to enter the traditional financial market, and also provides investors and financial institutions with more ways to participate in the digital asset market.
In fact, as early as December 16, 2022, the Hong Kong Stock Exchange listed two virtual asset futures ETFs-Southeast Asia Bitcoin Futures ETF (Stock Code: 3066) and South East Asia Ethereum Futures ETF (Stock Code: 3068), which are managed by South East Asia Asset Management Co., Ltd. and track standardized, cash-settled Bitcoin futures contracts and Ethereum futures contracts traded on the Chicago Mercantile Exchange (CME).In January 2023, the third virtual asset ETF was listed in the Hong Kong market, making the market have two Bitcoin futures ETFs and one Ethereum futures ETF.
The Hong Kong Stock Exchange became the first exchange in Asia to provide crypto asset ETF products, providing Asian investors with the opportunity to participate in virtual asset investment. The launch of the first batch of virtual asset ETFs is an important milestone in Hong Kong's virtual asset ecosystem, which means that global investors can get involved in the world of virtual assets in a regulated environment in the Asian time zone for the first time.
As the Bitcoin spot ETF is about to land in the Hong Kong market, how to regulate virtual assets has also become a core concern of the industry. The Hong Kong Securities and Futures Commission is also constantly optimizing its regulatory policies. On December 22, 2023, the Hong Kong Securities and Futures Commission issued the "Joint Circular on Virtual Asset-Related Activities of Intermediaries" and the "Circular on SFC-approved Funds Investing in Virtual Assets". Among them, the former circular clarified the risks of securities tokenization and the intermediary activities that intermediaries need to be regulated, including management, distribution, trading, consulting, etc.
The latter circular stated that the regulator is ready to accept applications for recognition of other funds involving virtual assets, including virtual asset spot ETFs, and also stipulates the regulations applicable to intermediaries when distributing virtual asset-related products and the ethical standards that should be met when distributing approved funds.
In addition, the Hong Kong Securities and Futures Commission also published several lists of virtual asset trading platforms to ensure that information about virtual asset trading platforms is released in a clear, transparent and timely manner. Among them, the "List of Licensed Virtual Asset Trading Platforms" lists the names of virtual asset trading platform operators officially licensed by the Securities and Futures Commission. Currently, only two crypto platforms have been approved by the Hong Kong Securities and Futures Commission-OSL Digital Securities Limited and Hash Blockchain Limited.
At the "2024 Hong Kong Web3 Carnival" held in Hong Kong on April 6, people from the Hong Kong regulatory authorities publicly stated that they will continue to promote more industry participation and promote the stable and responsible development of the virtual market through a multi-pronged approach such as timely information distribution and comprehensive public education. He said that currently more than 220 Web3.0-related companies from more than 20 regions including the Mainland, Europe and the United States have set up offices in Hong Kong, including virtual asset exchanges, blockchain infrastructure companies, blockchain network security companies, virtual currency wallets and payment companies. They will strike a balance between promoting development and appropriate supervision. Especially in the field of virtual assets, a comprehensive and clear regulatory system is the key to promoting its sustainable development.
