Hong Kong and the US offer future-based crypto ETFs, Exchange Traded Funds; however, Hong Kong is attempting to set a record in the Asia-Pacific region by becoming a hub for digital assets. The plan is to make a move on spot crypto ETFs. There are concerns about how they will align with regulatory authorities. Nevertheless, Hong Kong is optimistic that it will achieve far more than what it is considering achieving at the moment.
For instance, there is speculation that the region could soon bring in mandatory rules for stablecoins by 2023–2024.
One incident that is posing a larger challenge for the SFC, that is, the Securities & Futures Commission, is the fall of JPEX. The venture has a sword hanging from its head following the fraud of $204 million. This roughly translates to HK$1.6 billion. The crypto exchange has highlighted challenges and loopholes that the SFC needs to fix before moving forward in its mission of becoming a hub.
Julia Leung, the Chief Executive Officer of the SFC, has said that they are currently weighing retain-investor access to the product offering, adding that all the proposals are welcome to boost efficiency and customer experience, provided they are backed by innovative technology. Our approach is consistent, said Julia after stating that proposals should at least address new risks in the industry.
Spot Crypto ETFs are gaining popularity, in part because BlackRock’s offering is reportedly nearing completion. The anticipated approval date is early January 2024. The BlackRock date is susceptible to change, which encompasses the potential for its entirety to be rendered futile.
Hong Kong currently supports the listing of:
- CSOP Bitcoin Futures
- Samsung Bitcoin Futures Active
- CSOP Ether Futures ETFs
Their assets are collectively worth approximately $65 million.
Julia spoke about the fall of JPEX, addressing the issue as an incident that underscores why the region needs a robust and comprehensive regulatory framework.
Hong Kong Opens Doors to Tokenization
Moving forward, authorities in Hong Kong are exploring the possibilities of tokenization. Also known as a digital representation of real-world assets, it is a segment that has been discussed for a long time. It leverages the capabilities of blockchain technology and demonstrates the potential of cryptos.
The first green bond was sold by Hong Kong in February of this year, following which the SFC updated its regulatory guidance. Leung has committed to opening the market more as it evolves and instills confidence while making everyone comfortable with it.
Moreover, the latest circular has said that there are no restrictions on the offering of security tokens, which were earlier available only to professional investors. The Hong Kong Monetary Authority has now taken on the responsibility of guiding all the banks and educating them about providing digital-asset custodial services.
Prices of BTC and ETH have soared considerably following the announcement. BTC was last seen being traded at $35,261.64, and ETH was dancing around $1,898.16.
