Hong Kong set to lead Asia with spot bitcoin ETFs

Spot bitcoin exchange-traded funds could be launched in Hong Kong this month with the first approvals by the Securities and Futures Commission likely to be announced next week, two people familiar with the matter said.

At least four mainland Chinese and Hong Kong asset managers have submitted applications to launch the ETFs, sources said, including the Hong Kong units of China Asset Management, Harvest Fund Management, and Bosera Asset Management.

Meanwhile, a mainland financial media outlet under Tencent (0700) reported that SFC could approve the first batch of spot bitcoin ETFs as soon as next Monday.

This came after SFC permitted China Asset Management and Harvest Fund Management’s Hong Kong units to provide virtual-asset-related fund management services.

Bitcoin has gained more than 60 percent this year and hit an all-time high of US$73,803 (HK$575,663) in March. It was trading at around US$69,000 yesterday.

The timeline would make Hong Kong Asia’s first city to offer the popular ETFs and is much faster than industry expectations of launches sometime this year.

Regulators have sped up the approval process, according to one of the people.

Having lost much of its shine as a global financial hub due to restrictions during the pandemic, China’s faltering economy, and Sino-US tensions, Hong Kong authorities have been keen to do what they can to improve the city’s attractiveness for financial trading.

But cryptocurrencies are facing scams and cybersecurity risks, with a recent report by Smart Betting Guide saying that cryptocurrency users lost US$437 million to scams and hacks in the first quarter of this year.

Separately, the Hong Kong Monetary Authority and the Hong Kong Association of Banks launched Anti-Scam Consumer Protection Charter 2.0, further assisting the public in guarding against credit card scams and other digital frauds, with over 230 financial institutions and merchant institutions joining.

The new charter has also won support from the SFC, the Insurance Authority and Mandatory Provident Fund Schemes Authority.

In other news, the cross-border payment between Hong Kong’s Fast Payment System and Thailand’s PromptPay saw an average transaction amount below HK$200 currently, according to Undersecretary for Financial Services and the Treasury Joseph Chan Ho-lim.