Hong Kong Considers Allowing Individuals to Invest in Cryptocurrency ETFs

<p>As cryptocurrencies continue to gain traction in mainstream finance, Hong Kong's financial regulators are considering amending their 2018 crypto laws to let ordinary investors to invest in cryptocurrency exchange-traded funds (ETF).</p> <p>Julia Leung Fung-yee, the country's Deputy Chief Executive of the Security and Futures Commission (SFC), made the announcement during a seminar during the 2021 Hong Kong FinTech Week, according to local news outlet the South China Morning Post (SCMP).</p> <p>Previously, Hong Kong's cryptocurrency investment regulation permitted only professional investors with a nett worth of at least HK$8 million ($1.027 million).</p> <p>However, cryptocurrency investments have continued to gain traction with the debut of a variety of crypto-related products, like Bitcoin ETFs, on international exchanges.</p> <p>Due to the rapid expansion of crypto-related products, the Hong Kong SFC is evaluating whether its 2018 crypto guidelines should be retained or modified.</p> <p>Following the review, the SFC and the Hong Kong Monetary Authority (HKMA) will collaborate to issue a joint circular.</p> <p>Growing Interest in Cryptocurrency Exchange-Traded Funds</p> <p>At the time of press, no crypto ETFs had been approved for trading in Hong Kong.</p> <p>However, multiple applications for the product's debut in various outside markets, including the United States, have been received.</p> <p>Only last month, the US joined Canada and Brazil in approving the world's first Bitcoin fund, an investment that monitors the price of the world's largest cryptocurrency and is traded on a regulated stock market, providing investors with indirect exposure to the asset class.</p> <p>Investors Gain Exposure to Bitcoin via Online Platforms</p> <p>Although Hong Kong prohibits the trading of Bitcoin funds within the territory, both retail and institutional investors continue to experiment with the investment vehicle via internet brokers.</p> <p>According to the SFC's survey, around 54% of Hong Kong traders had