Financial powerhouse Hong Kong, which became more crypto-tolerant last year, could be one of the first in Asia to approve spot Bitcoin exchange-traded funds (ETFs). If the US approves such an ETFThat’s what industry leaders think.
Yat Siu, chairman of web3 investor Animoca Brands, told The Block that the Hong Kong Securities and Futures Commission’s positive stance on digital assets sets the stage decently for a potential spot Bitcoin ETF.
“If you look at what the SFC said, I think it was a month ago, they said they were open to expanding access to digital assets,” Siu said. The end of today. “
The United States continues to move closer to approval of the first spot Bitcoin ETF, with multiple filings accommodating relevant SEC requirements. Creation and redemption mechanismss.
“I imagine it [Hong Kong] There will be more to come, especially since the United States has already done a lot of work,” Siu added, noting that there are a number of public filings and applications that Hong Kong authorities can refer to.
Clearer regulations
Unlike neighboring mainland China’s widespread crackdown on crypto trading and mining, Hong Kong has rolled out its welcome mat for crypto companies this year and gone even further. as an encouragement to banks to cooperate..
In October 2022, Hong Kong authorities issued a series of statements. policy statement About cryptocurrencies to strengthen its position as a global financial center. In June, Hong Kong officially launched a crypto licensing regime for virtual asset trading platforms, allowing licensed exchanges to offer retail trading services.
Julia Leung, CEO of Hong Kong SFC, said in November that the regulator: Spot Crypto ETF Evaluation Because it welcomes “proposals using innovative technology to improve efficiency and customer experience.” Hong Kong currently has several futures-based crypto ETFs listed, including the Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF.
Glenn Woo, head of APAC sales at Web3 infrastructure company Blockdaemon, echoed similar positive sentiments in an interview with The Block this month. Although there are still concerns from traditional asset managers, “the spirit is definitely there,” he said.
“There’s an appetite there,” said Mr. Wu, who has more than a decade of experience in Hong Kong’s traditional finance industry. “We don’t know if it will be released next year or the year after, but once the US approves ETFs first, demand will increase.”
Potential challenges
Demand for spot Bitcoin ETFs may be strong in Hong Kong, but Wu points to hesitation from potential ETF issuers and the need for collaboration between traditional financial institutions and crypto-native entities. Emphasized gender.
“This will be a collaborative effort,” Wu said, adding that to ensure the success of the Spot Bitcoin ETF in Hong Kong, traditional custodians and crypto-native custody and wallet service providers He added that more partnerships are needed between the two countries.
Liquidity is another concern, Wu noted. “How do we define which markets these asset managers can access to raise that liquidity? Because we intend to only allow Hong Kong virtual asset service providers to provide liquidity. Maybe not enough. Are they going to open some US venues or some other venues to extract liquidity to support the launch of spot ETFs? ?” he asked.
Growing interest in Asia
As the debate over Asia’s spot Bitcoin ETF continues, crypto exchange WOO predicts that the industry’s center of gravity will shift from the West to the East next year.
“Last cycle, there was a lot of participation from Western countries, whether it was Thaler stuffing Bitcoin onto MicroStrategy’s balance sheet or PayPal dumping shitty coins on millions of retailers,” WOO said. Co-founder Jack Tan said. “However, we believe the next cycle will be driven from the East and see a return to retail participation led by key regions including: [South] Korea, Hong Kong, and Japan. ”
Chen-Yi Ong, head of Asia-Pacific policy at blockchain research firm Chainalysis, expects 2023 to be the year of regulation in the region, with actual implementation occurring in 2024. It will be introduced and take shape in 2023,” Ong said in a statement shared with The Block.
“This is not just in lighthouse jurisdictions like Singapore and Hong Kong, but also in the wider region,” Mr Ong added. “For example, in Australia, a consultation paper on the regulation of digital asset platforms is underway. In South Korea, the Virtual Asset User Protection Act has been passed. In 2024, these frameworks will be implemented in practice. But it will take some time.”
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