## Hong Kong Approves First Bitcoin and Ether ETFs
Hong Kong has conditionally approved its first spot bitcoin and ether exchange-traded funds (ETFs), paving the way for the city to become Asia's first to accept the cryptocurrencies as a mainstream investment tool.
At least three offshore Chinese asset managers will launch the virtual asset spot ETFs soon. The Hong Kong units of Harvest Fund Management and Bosera Asset Management have received conditional approvals from the Hong Kong Securities and Futures Commission (SFC) to launch the ETFs. China Asset Management - ChinaAMC (HK) has also received regulatory approval to provide virtual asset management services and is developing spot ETFs of bitcoin and ether.
The SFC issues a conditional authorization letter to an ETF application if it generally satisfies its requirements, subject to various conditions, including fee payments, filing of documents, and the Hong Kong Stock Exchange's (HKEX) listing approval.
This step comes just three months after the U.S. launched its first ETFs to track spot bitcoin. Those ETFs have already drawn roughly $12 billion in net inflows.
While cryptocurrency is banned in mainland China, Hong Kong has been promoting the city as a global digital asset hub, as part of a drive to boost its attraction as a financial center.
"The introduction of the virtual asset spot ETFs not only provides investors with new asset allocation opportunities but also reinforces Hong Kong's status as an international financial centre and a hub for virtual assets," Bosera Asset Management (International) said in its statement.
Bosera will launch its product in partnership with Hong Kong-based HashKey Capital.
Virtual asset spot ETFs in Hong Kong will introduce an "in-kind" subscription mechanism that allows investors to buy into ETF shares using bitcoin or ether directly.
Chinese financial institutions, faced with faltering Chinese equity markets in recent years, have been keen to participate in crypto asset development in Hong Kong.
The conditional approval will help Harvest Global's goal of promoting industry innovation and meet diverse demand among investors, Harvest Global Investments CEO Han Tongli said.
Bitcoin has gained more than 50% this year and hit an all-time high of $73,803 in March. It was trading at around $66,000 on Monday.