Hong Kong, which aims to become a major center for the crypto industry in the Asia-Pacific region, is considering allowing retail investors to buy spot crypto exchange-traded funds (ETFs).
The decision is based on a desire to attract retail investors to launch ETFs while meeting regulatory requirements, as well as to address the fallout from the JPEX ETF scandal.
"We welcome offerings that use innovative technology to enhance efficiency and convenience for clients," said Julia Leung, Chief Executive of the Securities and Futures Commission of Hong Kong (SFC).
"We are happy to test them, provided that new risks are considered," she added.
The cryptocurrency sector sees ETFs as a way to make digital assets more popular because such funds are easily accessible to a wide range of investors, Bloomberg reported.
The collapse of the cryptocurrency market in 2022 due to the FTX crash has caused many investors and traders to flee this sector of the financial market, leading many countries to take a number of measures to restore confidence in digital assets.
In June, the Hong Kong government introduced rules on the use of virtual assets to attract businesses and protect investors. Specifically, the SFC increased the transparency of the application process for virtual asset exchange licenses and required retail investors to trade major cryptocurrencies on licensed exchanges such as OSL and HashKey.
Currently, futures-based crypto ETFs are allowed in Hong Kong, but they have not gained widespread popularity. Currently, the Samsung Bitcoin Futures Active, CSOP Bitcoin Futures, and CSOP Ether Futures ETFs are listed in the Hong Kong market.
It is worth noting that Hong Kong is competing with other jurisdictions, such as Singapore, Dubai, and the European Union, for the title of global digital asset hub.
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