While the United States refuses to approve a Bitcoin spot ETF, Hong Kong has already taken its first steps. According to information, Yibo Finance is negotiating the creation of such an ETF in the region.
Spot ETFs directly invest in BTC by purchasing the cryptocurrency. In this way, they allow the investor to have direct exposure to Bitcoin, rather than futures contracts or indices.
Yibo Finance has received approval from the Hong Kong Regulator (SFC) to operate as a Virtual Asset Service Provider (VASP). But the company already has cryptocurrency ETFs and now wants to launch a BTC fund.
Hong Kong Bitcoin ETF
It should be noted that Yibo has yet to receive approval to operate the ETF. According to the Hong Kong Commercial Daily portal, the process is still in the negotiation phase between the company and regulators. One of the options is to allow funds that track BTC spot prices to be listed as ETFs.
The company has also applied for a virtual asset service provider (VASP) license and a category 7 license for automated trading services. In these two cases, the company has received approval and can offer its services to retail investors.
Recently, Samsung Asset Management Hong Kong launched a BTC ETF, but backed by futures. That is, the fund does not invest in BTC directly, but in contracts that track the price of the cryptocurrency.
This ETF tracks BTC price performance by investing in products listed on the Chicago Mercantile Exchange (CME).
Yibo chairman Chengyu Zhu says Hong Kong’s regulations are still at an early stage. Both the SFC and the Hong Kong Monetary Authority (HKMA) are working to transform the city into a cryptocurrency hub.
As reported by CriptoFácil, Hong Kong authorized citizens to buy cryptocurrencies last month. But many funds cannot buy directly, and they can benefit from a cryptocurrency ETF.
Hong Kong advances in the crypto sector
Hong Kong will potentially get its first approved stablecoin as licensed custodian First Digital has launched the FDUSD stablecoin. The First Digital USD (FDUSD) issued by the First Digital Trust is backed by cash or dollar-denominated assets on a 1-to-1 basis.
However, retail investors will not be trading stablecoins due to pending Hong Kong Monetary Authority (HKMA) regulations on stablecoins. To clear these trades, regulators will need to issue additional rules.
Major cryptocurrency exchanges such as OKX and Huobi are applying for licenses to operate in Hong Kong. Regulators are taking a cautious approach to their cryptocurrency regulations and guidelines.
