A Hong Kong legislator has called on the government to swiftly emulate the U.S., which approved spot bitcoin exchange-traded funds on Jan. 10.
In a Jan. 11 X post, Hong Kong Legislative Council member Johnny Ng urged the city to foster innovation in the cryptocurrency space, emphasizing the region’s readiness to lead in Asia by implementing relevant policies and products.
Ng cited the Securities and Futures Commission’s (SFC) prior willingness to consider applications for spot bitcoin ETFs as a positive sign. He also underscored the importance of establishing Hong Kong as a global hub in the virtual asset sector, especially given the industry’s rapid developments and competitive nature.
In addition to advocating for the approval of spot bitcoin ETFs, Ng called on the Hong Kong government to focus on educating the public about cryptocurrencies. He emphasized the need for increased awareness and understanding of virtual assets to mitigate the risk of fraud and misuse.
In December, The Securities and Futures Commission and the Hong Kong Monetary Authority, the city’s central banking institution, reviewed their policy stance on cryptocurrencies. The regulators issued two circulars detailing the requirements for launching spot crypto ETFs in Hong Kong.
Livio Weng, COO of HashKey, a Hong Kong-based crypto exchange, revealed on Jan. 10 that several fund managers, including those with Chinese backing, are exploring the possibility of introducing spot crypto ETFs in the city.
Hong Kong has already seen the launch of futures crypto ETFs, such as the Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF. These products are accessible to investors with portfolios over $2 million through UBS in Hong Kong.
While there is a willingness among Hong Kong’s financial authorities to consider spot crypto ETFs, their approach to the broader cryptocurrency market remains cautious.
In late December 2023, the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) issued a statement allowing retail investors to buy stablecoins. However, they emphasized strict regulatory requirements for stablecoin issuers, including obtaining a special HKMA license.
The license mandates complete backing of stablecoins with equivalent reserves, segregation of reserve assets, transparent disclosure, regular reporting, and establishment of a physical office in Hong Kong staffed with a CEO and senior management to ensure regulatory compliance.
