Hong Kong wants to win against Dubai and Singapore

On Monday, Hong Kong accepted the first bitcoin and ether spot ETFs from several asset managers in a bid to become a global crypto hub.

Several management companies announced Monday that they had obtained a conditional green light from the Hong Kong Stock Exchange policeman for the first ETF funds replicating cryptocurrencies, in a financial center which hopes to become a leader in Asia for their use as investment tools.

China AMC HK, the local arm of China Asset Management, said in a statement that it has received the green light from the Securities and Futures Commission of Hong Kong (SFC) to provide virtual asset management services. The company said it is developing spot ETFs based on two cryptoassets, ether and bitcoin.

This will be done in partnership with BOCI-Prudential Trustee Limited, a joint venture of the fund management arm of the Bank of China (HK) and the British multinational insurance company. ETFs (exchange traded funds) dedicated to cryptocurrencies are new financial products that allow you to benefit from variations in cryptocurrencies without directly holding them.

Two other fund managers – Harvest Fund Management and Bosera Asset Management in Hong Kong – also said they had received conditional approvals from the SFC, Bloomberg reported. The SFC declined to comment. OSL Digital Securities will provide securities custody services to China AMC and Harvest to ensure transaction security, the licensed digital assets platform announced on Monday.

Crypto hub

Hong Kong has been trying to get ahead as a regional cryptoasset hub as its status as an international financial center has been undermined by China’s political unrest and economic slowdown. This decision comes three months after the green light given in the United States to ETFs indexed to the spot price of bitcoin.

The Hong Kong financial center is “seeking to establish itself as a competitor” in the same space as Dubai and Singapore as “regulators open up cryptoasset markets to institutional demand,” said Tickmill analyst James Harte.

He added that bitcoin futures were down “around 7% at the day’s low before sentiment reversed” after the Hong Kong news. In December, the SFC declared itself ready to allow retail investors to purchase funds invested 100% in certain cryptoassets, triggering applications from fund managers.