HSBC Hong Kong now allows trading of Bitcoin and Ethereum ETFs.

HSBC Hong Kong is the largest bank in the Chinese special administrative region and the first bank there to let clients trade bitcoin and ether ETFs listed on the Hong Kong exchange.

Some of the cryptocurrency ETFs listed in Hong Kong include the CSOP Bitcoin Futures ETF, the CSOP Ethereum Futures ETF, and the Samsung Bitcoin Futures Active ETF​.

Here are the three ETFs:

  1. CSOP Bitcoin Futures ETF: This is a sub-fund of the CSOP ETF series, an umbrella unit trust fund established under Hong Kong law. The sub-fund is an actively managed exchange-traded fund whose units trade on the Hong Kong Stock Exchange like stocks. The CSOP Bitcoin Futures ETF and CSOP Ethereum Futures ETF track standardized, cash-settled Bitcoin and Ethereum futures contracts traded on the Chicago Mercantile Exchange (CME). Both ETFs were launched in December 2022 and are managed by CSOP Asset Management​1​.

  2. CSOP Ethereum Futures ETF: This is also a sub-fund of the CSOP ETF series and is also an actively managed exchange-traded fund. The fund's investment objective is to achieve long-term capital growth by investing primarily in CME Ethereum futures and adopt an active investment strategy. It should be noted that the fund does not invest directly in Ethereum.

  3. Samsung Bitcoin Futures Active ETF: This is a sub-fund of Samsung ETF Trust III, an umbrella unit trust fund established under Hong Kong law. Its units are listed and traded on the Hong Kong Stock Exchange. The fund's investment objective is to provide economic exposure to the value of Bitcoin by investing primarily in front-month Bitcoin futures contracts on the Chicago Mercantile Exchange. Launched in January 2023, the fund is managed by Samsung Asset Management Hong Kong and tracks the spot price of Bitcoin, achieving this objective by investing in Bitcoin futures and Micro Bitcoin futures on the Chicago Mercantile Exchange.

The news comes after the region’s banking regulator put pressure on several of Hong Kong’s largest banks, including HSBC, to accept cryptocurrency exchanges as clients earlier this month. In a letter sent to the banks in April, the Hong Kong Monetary Authority said that conducting due diligence on accepting crypto clients should not be “unduly burdensome”​.

"Undue burden" means that an activity or process (in this case, due diligence on accepting a cryptocurrency exchange as a customer) may be overly complicated, time-consuming or costly, which may hinder or prevent the activity or process from being carried out. In this context, the Hong Kong Monetary Authority is expressing that due diligence on accepting a cryptocurrency exchange as a customer should not be an overly onerous or difficult task, that is, it should not be an "undue burden".

Hong Kong has recently become more publicly welcoming of cryptocurrencies, in contrast to the public stance of leaders in mainland China. Earlier this month, Hong Kong established a licensing system for cryptocurrency exchanges and reopened retail trading of selected cryptocurrencies.

Some have speculated that Hong Kong’s openness to cryptocurrencies could eventually lead to a thaw in mainland China’s cryptocurrency ban.