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(Kitco News) -
HSBC Hong Kong has enabled the trading of bitcoin and ether exchange-traded funds (ETFs) listed on Hong Kong's stock exchange.
The news was first reported by Colin Wu of Wu Blockchain on Twitter early Monday morning. “HSBC, the largest bank in Hong Kong, today allows its customers to buy and sell Bitcoin and Ethereum ETFs listed on the Hong Kong exchange, and is also the first bank in Hong Kong to allow it,” he wrote. “The move will expand local users’ exposure to cryptocurrencies in Hong Kong.”
HSBC is the largest bank in the Hong Kong special administrative region, and their Hong Kong investment platform now lists three crypto ETFs available for trading: Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ethereum Futures ETF.
Samsung Bitcoin Futures Active ETF was launched in January 2023 and is managed by Samsung Asset Management Hong Kong. The BTC futures ETF tracks the spot price of Bitcoin by investing in Chicago Mercantile Exchange (CME) Bitcoin Futures and CME Micro-Bitcoin Futures.
“Hong Kong is the only market in Asia where Bitcoin futures ETFs are listed and traded in the institutional market,” said Park Seong-jin, head of Samsung Asset Management Hong Kong. “It will be a new option for investors who are interested in Bitcoin as a competitive product that reflects their experience in risk management.”
CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF track the standardized, cash-settled Bitcoin and Ether futures contracts traded on the Chicago Mercantile Exchange (CME). They were launched in December 2022 and are managed by CSOP Asset Management.
“Coming after the recent liquidity problems affecting some of the crypto platforms, our two crypto futures ETFs demonstrate that Hong Kong remains open-minded on the development of virtual assets," said CSOP head of quantitative investment Yi Wang at the time. “As the ETFs do not invest in physical bitcoin, and are traded on regulated U.S. and Hong Kong exchanges, there are more regulatory safeguards for investors compared to tokens traded on unregulated platforms.”
The move by HSBC comes after reports that the government of the special administrative region has begun pressuring large banks to onboard cryptocurrency exchanges as clients following the launch of retail crypto trading in Hong Kong on June 1.
The Hong Kong Monetary Authority (HKMA) is pressuring banks established in the region – including HSBC, Standard Chartered and Bank of China – to take on cryptocurrency exchanges as clients, even as regulators in the U.S. have discouraged banks from providing services to the sector.
“HKMA encouraged the banks to not be afraid,” a person with knowledge of the discussion said. “There is resistance from a conventional banking mindset… we are seeing some resistance from senior executives at traditional banks.”
The government of Hong Kong remains steadfast in its goal of being a leader in the blockchain space, but with the U.S. and its SEC viewed as one of the most influential players in global financial regulations, financial institutions remain hesitant to go all-in on cryptocurrencies for fear of reprisals.
Banks “are having to tread a fine line between, on the one hand getting encouragement to support crypto and exchanges, but on the other hand being aware of the US situation,” said a senior executive briefed on the meeting with the banks.
The HKMA’s focus on encouraging HSBC, Standard Chartered and Bank of China to accept cryptocurrency exchanges as clients is noteworthy because the trio is responsible for issuing Hong Kong’s currency and holds the chair and two vice-chair posts at the Hong Kong Association of Banks lobby group.
