Advertisement
Financial regulation
TechPolicy

Hong Kong prepares for retail access to spot cryptocurrency exchange-traded funds, boosting city’s virtual-asset hub ambitions

  • Hong Kong is prepared to authorise funds with direct exposure to virtual assets, according to the city’s securities regulator and central bank
  • This move shows policymakers’ determination to rebuild confidence in virtual assets, following major financial scandals involving cryptocurrencies

Reading Time:2 minutes
Why you can trust SCMP
2
Spot cryptocurrency exchange-traded funds enable investors to gain exposure to virtual assets without directly buying any crypto tokens. Photo: Shutterstock
Xinmei Shen
Hong Kong will allow retail access to exchange-traded funds (ETFs) that invest directly into cryptocurrencies, as the city steps up efforts to expand its nascent virtual-asset industry and become a major crypto hub.
Advertisement
The Securities and Futures Commission (SFC) is prepared to authorise funds with direct exposure to virtual assets, including spot virtual asset ETFs, according to a circular jointly issued on Friday by the securities regulator and the Hong Kong Monetary Authority, the city’s de facto central bank.

Spot cryptocurrency ETFs enable investors to gain exposure to virtual assets without directly buying any crypto tokens. These funds are considered by the crypto industry as important vehicles for virtual assets to become more attractive to mainstream investors.

Hong Kong previously only allowed retail participation in cryptocurrency futures ETFs, which hold virtual-asset futures contracts, instead of direct investments in crypto tokens at their spot prices.

03:03

The cryptocurrency scandal gripping Hong Kong

The cryptocurrency scandal gripping Hong Kong
Hong Kong’s latest initiative shows the determination of policymakers to rebuild investors’ confidence in virtual assets, following a number of large financial scandals involving cryptocurrencies – including the recent cases of Hounax and JPEX in the city, as well as the spectacular collapse of crypto exchange FTX in November last year.
Advertisement
“This move puts Hong Kong in a leading position in the global crypto landscape,” said Neil Tan, managing partner at local fintech consulting firm Tsunami Advisors and chairman of the FinTech Association of Hong Kong.
Advertisement