HK gives initial approval to bitcoin, ether spot ETF

HONG KONG: Hong Kong gave initial approval to its first spot bitcoin and ether exchange traded funds (ETF) yesterday, money managers said, paving the way for the city to become Asia’s first to accept the cryptocurrencies as a mainstream investment tool.

At least three offshore Chinese asset managers will launch the virtual asset spot ETF soon.

The Hong Kong units of Harvest Fund Management and Bosera Asset Management said in separate statements they had received conditional approvals from the Hong Kong Securities and Futures Commission (SFC) to launch the ETF.

Meanwhile, the Hong Kong unit of China Asset Management – ChinaAMC (HK), said it has received regulatory approval yesterday for the provision of virtual asset management services, and the firm is actively developing the spot ETF of bitcoin and ether.

This comes just three months after the US launched its first ETF to track spot bitcoin.

The US launch set an example for other regions as it has already drawn roughly US$12 billion in net inflows.

While cryptocurrency is banned in mainland China, Hong Kong has been pushing forward to promote the city as a global digital asset hub, as authorities are making an all-out effort to improve the city’s attractiveness as a financial centre.

“The introduction of the virtual asset spot ETF not only provides investors with new asset allocation opportunities but also reinforces Hong Kong’s status as an international financial centre and a hub for virtual assets,” Bosera Asset Management (International) said in the statement.

Bosera will launch the product in partnership with Hong Kong-based HashKey Capital.

The virtual asset spot ETF in Hong Kong will introduce the so called “in-kind” subscription mechanism which allows investors to buy into the ETF shares using bitcoin or ether directly, Bosera added.

The conditional approval will help Harvest Global’s pursuit of promoting industry innovation and meet the diverse demand among investors, Harvest Global Investments CEO Han Tongli said. – Reuters