Hong Kong Lawmakers Advocate to Follow U.S. in Rapid Adoption of Spot Bitcoin ETFs

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A Hong Kong lawmaker has called on the government to quickly follow the lead of the United States, which approved a spot Bitcoin exchange-traded fund on January 10.

In a post on January 11, Hong Kong legislator Johnny Ng urged Hong Kong to promote innovation in the cryptocurrency field, emphasizing that the region is ready to lead Asia by implementing relevant policies and products.

The U.S. Securities and Exchange Commission (SEC) approved a spot Bitcoin ETF in the early hours of Hong Kong time. It is an important move for the virtual asset market and has also attracted more traditional investors and funds to invest in the virtual asset field. Since then, the SEC has passed the spot Bitcoin ETF. I think Hong Kong must dare to be a “leader” in the field of virtual assets and promote the development of the entire industry through innovative policies.

1. The SAR government accelerates the implementation of spot ETFs… pic.twitter.com/5b0fhHFQHh

— Johnny Ng 武杰庄 (@Johnny_nkc) January 11, 2024

Ng said it was a positive sign that the Securities and Futures Commission (SFC) had previously been willing to consider applying for a spot Bitcoin ETF. He also emphasized the importance of establishing Hong Kong as a global hub for the virtual asset industry, especially given the rapid development and competitive nature of the industry.

In addition to advocating for the approval of a spot Bitcoin ETF, Ng also called on the Hong Kong government to focus on educating the public about cryptocurrency. He emphasized the need to increase awareness and understanding of virtual assets to reduce the risk of fraud and abuse.

In December last year, Hong Kong’s Securities and Futures Commission and the Hong Kong Monetary Authority (HKMA) revisited their policy stance on cryptocurrencies. The regulator issued two notices detailing the requirements for launching spot cryptocurrency ETFs in Hong Kong.

Livio Weng, chief operating officer of Hong Kong-based cryptocurrency exchange HashKey, revealed on January 10 that several fund managers, including those with Chinese background, are exploring the possibility of introducing spot crypto ETFs in Hong Kong.

Hong Kong has launched futures crypto ETFs such as the Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF. Investors with portfolios exceeding US$2 million can purchase these products through UBS Hong Kong.

While Hong Kong’s financial authorities are willing to consider spot cryptocurrency ETFs, their approach to the broader cryptocurrency market remains cautious.

In late December 2023, the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) issued a statement allowing retail investors to purchase stablecoins. However, they emphasized strict regulatory requirements for stablecoin issuers, including obtaining a special license from the Hong Kong Monetary Authority.

The license requires full backing of the stablecoin with equivalent reserves, segregation of reserve assets, transparent disclosures, regular reporting, and a physical office in Hong Kong staffed by a CEO and senior management to ensure regulatory compliance.