Hong Kong needs to speed up approval of spot cryptocurrency exchange-traded funds after US launch, industry insiders say

Eleven spot bitcoin ETFs – together with BlackRock’s iShares Bitcoin Belief, Grayscale Bitcoin Belief and ARK 21Shares Bitcoin ETF, amongst others – started buying and selling on Thursday, following the US Securities and Exchange Commission’s landmark approval that’s anticipated to assist convey the cryptocurrency industry nearer to the extra regulated world of conventional finance.

Blackrock representatives ring the opening bell with guests at the Nasdaq MarketSite in New York on January 11, 2024, as bitcoin spot exchange-traded funds began trading. Photo: Bloomberg — Blackrock representatives ring the opening bell with friends on the Nasdaq MarketSite in New York on January 11, 2024, as bitcoin spot exchange-traded funds started buying and selling. Picture: Bloomberg

The profitable US launch of spot bitcoin ETFs is predicted to assist transfer Hong Kong regulators nearer to authorising comparable cryptocurrency funds to function within the metropolis.

Spot cryptocurrency ETFs allow buyers to achieve publicity to digital belongings with out instantly shopping for any crypto tokens.

These funds “give the crypto industry extra legitimacy and in addition opens up extra collaboration alternatives with mainstream finance”, stated RJ Ke, a researcher with ethereum scaling start-up Taiko. “Hong Kong is probably going to speed up bitcoin ETF functions within the coming months.”

Round 10 fund administration companies are making ready to launch spot digital asset-backed ETFs in Hong Kong, in accordance to Chinese language media Caixin’s interview on Wednesday of Livio Weng, chief working officer at crypto trading app operator HashKey Group. Weng stated that up to eight firms had been at an “superior stage” to launch.

US regulator SEC authorises spot bitcoin ETFs in cryptocurrency breakthrough

Bitcoin jumped about 3.4 per cent to US$47,500, following the spot crypto ETF approvals within the US. That was almost thrice the extent that the unique cryptocurrency reached in November 2022, when failed crypto exchange FTX filed for bankruptcy to ship bitcoin’s worth beneath US$17,000.

Hong Kong needs to launch spot digital asset ETFs as quickly as doable to “be certain that the town stays aggressive within the world cryptocurrency market and strengthen its place as a world monetary centre”, stated Mao Shixing, also called “Discus Fish”, who’s the co-founder and chief govt of digital asset custody options supplier Cobo.

Mao stated the US approvals might affect different jurisdictions as a result of “the SEC is one of essentially the most influential and respected monetary regulators on the planet”, including that the company’s initiatives “usually function necessary references for monetary regulators in different nations and areas”.

“Nonetheless, every nation and area has its personal unbiased stance and regulatory goals,” he stated.

Hong Kong to push retail access to spot cryptocurrency exchange-traded funds

Echoing the Cobo head’s view, Donald Day, chief working officer at digital asset platform VDX, stated the SEC’s determination would make its friends “critically take into account whether or not comparable ETFs could be permissible and fascinating”.

Day identified that the SFC’s assertion in December about being ready to authorise such funds has “in precept opened a pathway for issuers to launch spot crypto ETFs in Hong Kong”.

With the US, there are actually 9 markets all over the world which have allowed the operation of spot crypto ETFs. The opposite markets embrace Canada, Germany, Switzerland, and tax havens such because the Cayman Islands within the Caribbean and Jersey close to the coast of northwestern France, in accordance to market analytics agency CoinGecko.

Mainland China, nonetheless, is unlikely to comply with go well with.

Beijing to draft national Web3 development plan amid strict cryptocurrency ban

The Chinese language authorities banned banks from dealing with bitcoin in 2013 and compelled cryptocurrency exchanges to transfer offshore in 2017. In 2021, the nation’s regulators reiterated the state’s prohibition on all monetary establishments from participating in crypto-related actions.

China’s state media lately emphasised the dangers concerned in spot cryptocurrency ETFs.

The US approval of spot bitcoin ETFs “would make the cryptocurrency market much more frantic, offering fertile floor for unlawful transactions similar to cash laundering”, in accordance to a report by the Worldwide Monetary Information, a newspaper beneath the Individuals’s Every day, which cited Shanghai Jiao Tong College assistant professor Li Nan.

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