Hong Kong is considering the idea of approving the launch of spot crypto exchange traded funds (ETFs), as long as the risks associated with these investment products are addressed.
The chief executive of the Hong Kong Securities and Exchange Commission, Julia Leung, said in a recent interview that the focus of the regulator’s approach remains ‘consistent’ no matter what the asset.
The CEO of the Hong Kong SEC said that as long as the risks associated with spot cryptocurrency exchange-traded funds (ETFs) are managed adequately, they would consider permitting these products to be issued.
Leung said that they were welcome to receive proposals that use innovative technology to improve customer experience and efficiency.
She went on to say that they were willing to give it a shot if the new risks were properly addressed because their goal remains consistent no matter what asset is involved.
The city has already approved futures-based crypto ETFs trading, but their reach is significantly limited.
There are currently only three offerings available in Hong Kong, which manage about $65 million. As compared to the overall value of the local ETF market, this number is very low.
Furthermore, it should also be noted that Hong Kong has taken steps to allow retail investors to access tokenized real-world assets.
This has opened up the opportunity for the larger market to also get access to these instruments. Leung also shed light on this matter.
She said that with the step-by-step evolution of the crypto ecosystem, they did not have a problem with opening it up to the wider public, as long as it reached the point where they were comfortable.
This stance of the Hong Kong regulatory authority is drastically different than that of the regulators in the United States.
The US authorities have repeatedly turned down requests for the approval of the launch of the spot Bitcoin ETF.
However, experts have now become optimistic about a spot bitcoin ETF being approved in the United States soon.
This was after Grayscale was granted a legal victory last month in which the US Securities and Exchange Commission (SEC) was ordered by the U.S. Court of Appeals for the D.C. Circuit to reconsider the company’s ETF application.
Gary Gensler, the Chairman of the US SEC, had recently acknowledged that they had already received around 8 to 10 ETF applications.
The SEC boss also said that each of the applications would be reviewed by the regulator without any prejudgement.
Lawmakers have also been critical of the actions of the SEC. A letter was sent to the SEC by US Representatives Ritchie Torres, Mike Flood, Wiley Nickel, and Tom Emmer back in September.
The lawmakers had asked the security agency to approve a spot Bitcoin ETF quickly and had also said that moving forward, the position of the SEC was ‘untenable’.