Hong Kong is thinking of launching spot ETFs to retail financiers. This move could boost its economy and strengthen its position in the Asia-Pacific region’s digital asset market. The proposal to grant investors access to spot ETF is under review as long as regulations are met.
On Monday, Jan 1, SFC CEO Julia Leung revealed the city’s perspective on this topic. She emphasized the vital role of modern technology in improving performance and retaining customers. Leung expressed that.
“We’re happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset.”
However, both Hong Kong and the United States offer futures-based cryptocurrency ETFs, yet they aren’t well adopted compared to more common fund industries. In Hong Kong, some available choices are ETFs such as Samsung Bitcoin Futures Active, CSOP Bitcoin Futures, and CSOP Ether Futures. They hold an estimated combined value of about $65 million.
The Asia-Pacific region’s share of listed cryptocurrency funds, value-wise, is relatively small. Hong Kong, aiming to be recognized as a progressive financial hub, developed a specific regulation for virtual assets in June. It targets to magnetize companies and fortify investor protection.
The recent fraud incident involving JPEX, an unlicensed cryptocurrency exchange that scammed HK$1.6 billion ($204 million), highlighted the importance of investor safety. Leung stated that such mishaps call for stronger regulations.
Hong Kong Is Considering Tokenization
Additionally, Hong Kong is stepping into the world of tokenization. This process converts real-world goods into their digital form using blockchain technology. However, the launch of digital green bonds in February and updated rules from the SFC show that tokenized products for the average investor are on the horizon.
Speaking on November 2, Leung expressed that if the cryptocurrency sphere continues to develop to a stage of stability, they’re prepared to broaden their reach to other investors. The same day, the SFC shared new directives detailing strategies to launch tokenized funds and bonds to the public investor, expecting to run initial tests, each containing different tokenization levels.
Furthermore, the central bank in Hong Kong is also looking into creating a guide for banks to provide services that manage digital assets. These services are a crucial part of building up a network around digital assets.
Hong Kong and other significant finance spots compete for a leading role in the digital currency world. Hong Kong’s smart planning for managing and introducing cryptocurrency could prove crucial in the next chapter of the Asia-Pacific’s financial sector.
In comparison, powerhouses like Singapore, Dubai, the European Union, and the United States are following their paths. The U.S., for example, leans towards tighter rules. Yet, Hong Kong’s balanced view is attracting a lot of notice. The unfolding actions in Hong Kong need careful observation because they might impact the wider money industry in the region.
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“The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.“
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