Apr 11, 2024 04:15
On numerous occasions, China has banned various activities with bitcoin (BTC) and cryptocurrencies, including trading, transactions, and mining. For this reason, in mainland China, the launch of exchange-traded funds (ETFs) based on this type of financial asset is not permitted.
However, Hong Kong, while part of China, is considered a 'special administrative region' able to govern itself separately from mainland China in certain cases, one of which is the ability to regulate Hong Kong-based investment firms. When it comes to crypto, Hong Kong allows companies and residents to invest, putting them at odds with mainland China, where crypto remains banned.
Bitcoin ETF's via Hong Kong....
Financial news outlets in China are now reporting that financial giants such as Harvest Fund and Southern Fund have submitted applications to launch bitcoin ETFs through their Hong Kong subsidiaries. Harvest Fund manages more than $230 billion in total assets, while Southern Fund manages over $280 billion.
Additionally, smaller companies like 'Jiashi Fund' are attempting to use their Hong Kong subsidiary, 'Jiashi International,' to offer clients access to a Bitcoin ETF.
Regardless of size, all companies that have applied are now awaiting the decision of the Hong Kong Securities and Futures Commission, the regulatory authority that will be deciding on these applications.
Approval May Come Soon - Catching Many Off-Guard...
According to reports from China, these firms are expecting to receive approval to launch their Bitcoin ETF products and believe they could be actively promoting them as early as this quarter.
Bitcoin ETF approval in Hong Kong would be another major milestone for Bitcoin, making it easily accessible in one of the world's largest financial markets.
China has been off the radar for most crypto investors as there's been little reason to pay much attention as it's remained firm on their existence stance, and while trading continued in Hong Kong, the volume coming from this small beacon of freedom isn't determining any winners and losers. But ETF's bring the potential for large investments from Chinese corporations, potentially attracting other Asian nations already active in the Chinese markets.
An Influence on Mainland China...
If Bitcoin ETFs in Hong Kong turn out to be a success, and especially if they manage to attract international capital, companies in mainland China will likely respond by putting pressure on the government to reconsider their stance toward bitcoin.
Chinese President Xi Jinping will find it difficult to defend the position if the US, European nations, and now Hong Kong companies stake their claim in the multi-billion dollar Bitcoin ETF market, while those in mainland China are forced to remain spectators.
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Author: Adam Lee
Asia News Desk / Breaking Crypto News
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