Hong Kong’s top regulatory bodies advance in the cryptocurrency sector as the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) jointly announced that they are ready to accept applications for spot crypto Exchange-Traded Funds (ETFs). The regulatory bodies have reviewed their existing policies about intermediaries engaging in virtual asset-related activities.
The SFC, known for its role in overseeing financial markets, disclosed its willingness to consider applications for the authorization of funds exposing investors to virtual assets. This includes a noteworthy mention of virtual asset spot exchange-traded funds (VA spot ETFs), signaling a broader scope for crypto investment options.
Additionally, SFC has issued a separate circular outlining specific requirements for funds seeking direct investment in spot virtual asset (VA) tokens. These tokens must be accessible to the Hong Kong public through platforms licensed by the SFC, known as virtual asset trading platforms (VATPs).
Emphasizing transactional protocols, the SFC specified that crypto transactions facilitated by such ETFs should be conducted exclusively through SFC-licensed crypto platforms or authorized financial institutions. Notably, the regulator highlighted the permissibility of both in-kind and in-cash subscription and redemption processes for SFC-authorized spot VA ETFs.
Addressing the critical aspect of custody, the SFC underlined that trustees or custodians of the funds should delegate their crypto custody functions exclusively to entities licensed by the SFC as VATPs or those meeting the crypto custody standards set forth by the HKMA.
This regulatory shift aligns with Hong Kong’s commitment to fostering a conducive environment for the evolving crypto landscape. The move toward spot crypto ETFs reflects an expansion of investment avenues in the virtual asset domain. Investors and industry observers are keenly watching how this development will shape the dynamics of crypto investments in the region.
On December 13, the Bank of China Hong Kong launched an e-CNY cross-border transaction and supported pilot companies in cross-border commodity trade worth RMB 24 million. This marks the first time that digital RMB has been used for cross-border settlement. According to Xinhua Finance Hong Kong, the bank has successfully piloted local central bank digital currency (CBDC) cross-boundary transactions.
