🔥Major benefits: Bitcoin/Ethereum is expected to face the mainland market?
At the Bitcoin Asia Summit, Harvest Fund CEO Han Tongli discussed the possibility of incorporating BTC and ETH ETFs into ETF Connect, hoping to open a direct investment channel for mainland investors, which requires mature conditions and successful applications in the next two years. The stock interconnection mechanism clarifies the openness of the capital market, but BTC and ETH ETFs do not meet the conditions due to their size, listing time and non-Hong Kong stock components. Mainland China’s existing regulatory policies strictly prohibit financial institutions from engaging in virtual currency business, constituting policy barriers. In summary, despite facing policy and technical challenges, market development trends and industry efforts indicate possible policy adjustments, emphasizing the challenges of cryptocurrency ETFs entering China, current regulatory limitations and future trends
🔺Mainland’s regulatory policy attitude
Judging from the legal provisions, mainland China does not directly prohibit individual investors from trading virtual currencies. In theory, if retail investors meet the financial threshold for opening Shanghai-Shenzhen-Hong Kong Stock Connect, that is, the total assets of securities and capital accounts are not less than 500,000 yuan, they can pass Shanghai-Shenzhen-Hong Kong Stock Connect indirectly invests in exchange-traded funds (ETFs) of cryptocurrencies such as BTC and ETH, which is a more convenient investment method and reduces the complexity and risks caused by directly holding cryptocurrencies.
However, the challenge of making Bitcoin and Ethereum ETFs truly open to trading for mainland investors is particularly daunting.
Especially for mainland financial institutions such as securities firms. The "Announcement on Preventing Financing Risks of Token Issuance" ("94 Announcement") jointly issued by the Central Bank and six other departments and the subsequent "Notice on Further Preventing and Dealing with Speculation Risks in Virtual Currency Transactions" (referred to as "924 Announcement") ) clearly delineates the red line for financial institutions in the virtual currency business and strictly prohibits them from providing services for any virtual currency-related activities, including but not limited to account opening, fund transfer, settlement and other financial services, and the use of virtual currency for any purpose. form of guarantee or subject matter insured
This means that if mainland brokers directly provide retail investors with services to purchase BTC and ETH ETFs, it will directly violate the provisions of the "94 Announcement" and the "924 Notice" and put themselves at serious legal risk.In this case, financial institutions have to find a delicate balance between compliance and market demand.
