Regulators in Hong Kong announced that they are prepared to review applications for exchange-traded funds (ETFs) that will trade cryptocurrencies on the spot market.
The virtual asset environment has evolved since the Securities and Futures Commission (SFC) developed a “professional-investors only” regulatory approach in 2018, according to a joint statement from the SFC and the Hong Kong Monetary Authority (HKMA).
Regulators’ views on retail exposure to digital assets have changed, and Hong Kong has been easing its stance on cryptocurrencies this year. A wider set of investors are now able to participate in spot-crypto and ETF investing thanks to changes made to the SFC’s rule book in October. Then, in a statement made to the media last month, SFC Chief Executive Officer Julia Leung stated that the agency was leaning towards permitting retail investors to purchase spot cryptocurrency ETFs and that it would “welcome proposals using innovative technology that boosts efficiency and customer experience” as long as any vulnerabilities were covered.
The two regulators stated in their statement on Friday that “the virtual asset landscape has evolved rapidly and begun to expand into mainstream finance.” The Securities and Exchange Commission “is prepared to accept applications for the authorisation of other funds with exposure to virtual assets, including virtual asset spot exchange-traded funds (VA spot ETFs).”
The announcement coincides with growing rumours that the U.S. Securities and Exchange Commission will probably approve a spot bitcoin exchange-traded fund (ETF) in the first few weeks of 2019.