Spot bitcoin exchange-traded funds could be launched in Hong Kong this month with the first approvals likely to be announced next week, two people familiar with the matter said.
That timeline would make Hong Kong the first city in Asia to offer the popular ETFs and is much faster than industry expectations for launches sometime this year.
Regulators have accelerated the approval process, according to one of the people.
Having lost much of its luster as a global financial center 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 business.
“The significance of Hong Kong ETFs is vast, as it could bring fresh global investment and also push crypto adoption to a new height,” said Adrian Wang, CEO of Metalpha, a Hong Kong-based crypto-wealth manager.
The United States launched the first U.S.-listed exchange-traded funds (ETFs) to track bitcoin in January, drawing about $12 billion in net inflows, data from BitMEX Research shows.
Bitcoin has gained more than 60% this year and hit an all-time high of $73,803 in March. It was trading at around $69,000 on Wednesday.
At least four mainland Chinese and Hong Kong asset managers have submitted applications to launch the ETFs, the two sources said.
The Hong Kong units of China Asset Management, Harvest Fund Management and Bosera Asset Management are among the candidates, according to the two people and a third source.
The sources were not authorized to speak to the media and declined to be identified.
Hong Kong’s Securities and Futures Commission (SFC) and the three Chinese companies declined to comment.
The Hong Kong units of China Asset Management and Harvest Fund Management obtained approval this month to manage portfolios that invest more than 10% in virtual assets, according to the SFC’s website.
Their parent companies are among the largest mutual fund firms in China, each managing more than 1 trillion yuan ($138 billion) in assets.
Although cryptocurrency trading is banned in mainland China, foreign Chinese financial institutions have been willing to participate in the development of crypto assets in Hong Kong.
Hong Kong has approved its first cryptocurrency futures ETFs in late 2022. The largest — the CSOP Bitcoin Futures ETF — has seen its assets under management swell sevenfold since September to about $120 million.
Hong Kong-based Value Partners also said it is exploring launching a spot bitcoin ETF. It did not disclose whether it had filed a request.