Hong Kong cryptocurrency ETF issuers remain unfazed by the crackdown on cryptocurrencies in the United States. They believe that the strong framework for crypto investments in Hong Kong will not be affected by regulatory changes in the US, even if Ethereum is labeled as a security.
Ahead of the launch of new spot crypto ETFs in Hong Kong, leaders in the financial sector expressed their confidence and preparedness at a press conference. Zhu Haokang from China Asset Management and Wayne Huang from OSL Digital Securities presented projections for the initial launch of these innovative investment products.
Zhu, who leads the digital asset management division at China Asset Management (Hong Kong), predicted a groundbreaking start for Hong Kong’s virtual asset spot ETF, surpassing the $125 million raised by US Bitcoin spot ETF issuers earlier this year. Huang, head of the OSL ETF and custody business, added that the Hong Kong Stock Exchange would announce substantial achievements in first-day fundraising, already outpacing their US counterparts.
The Spot China Bitcoin ETF and Spot China Ethereum ETF have distinct features that set them apart from similar products. These ETFs allow spot and physical subscriptions and redemptions, a feature not available in the US. They also offer counters in Hong Kong dollars, US dollars, and RMB, as well as options for listed and unlisted shares.
Investor interest in these ETFs extends globally, with Bitcoin miners using their holdings to directly purchase ETF shares. Investors from regions without their own ETFs, such as Singapore and the Middle East, as well as family offices across Asia and overseas, have shown keen interest due to the advantages of physical subscriptions and trading hours aligned with Asian markets.
Brokerage firms are also getting involved with the new ETFs. Besides Victory Securities, Huaying Securities, and others are preparing to handle physical subscriptions, with more expected to join in May. Huang emphasized the rigorous anti-money laundering measures in place, ensuring that only verified wallets can engage in transactions.
Huang made it clear that potential changes in US regulations regarding Ethereum would not sway the Hong Kong Securities Regulatory Commission’s independent standards and procedures. He explained the thorough compliance and due diligence process required to list new virtual assets, which currently includes only Bitcoin and Ethereum for retail trading in Hong Kong.
In conclusion, Zhu discussed the broader impacts of cryptocurrency ETFs, suggesting that they could contribute to compliance, expand funding channels, and offer new arbitrage opportunities. He defended the higher fees charged by China Asset Management Hong Kong, highlighting the flexibility, complexity, and innovation of their ETF offerings.