Huobi technologies a subsidiary of Huobi Global is proposing to develop an exchange-traded fund (ETF) that will track popular cryptocurrencies in Hong Kong.
Huobi has written to the Securities and Futures Commission (SFC) in Hong Kong, stating that the ETF will be structured in such a way that it will be accessible to retail investors with total assets of less than HK$8 million ($1 million).
The move would be Hong Kong’s first foray into cryptocurrency for regular investors. At the moment, crypto exchanges in the city are only permitted to serve professional investors.
Huobi hopes for more lenient crypto laws in Hong Kong
According to The South China Morning Post, the fund manager is counting on an eventual relaxation of the professionals-only regulation for crypto investment. It’s also betting on getting the ETF approved by keeping all of its trading and redemption in the city.
This is in the face of a planned measure that would prohibit merchants from directly exchanging Bitcoin and other cryptocurrencies, which would be disastrous for the city’s crypto uptake.
However, the SFC recently loosened its professionals-only policy on some ETFs, implying that it may do so for crypto-related products as well. The SFC’s principal purpose is to safeguard individual investors from market shocks and volatility, which the crypto market is particularly vulnerable to.
Huobi already provides professional investors with a number of cryptocurrency-related products. It is one of only four fund managers allowed to do so by the SFC.
While crypto ETFs are currently available in certain American and European markets, retailers in Asia have fewer options for investing in the area. However, more lenient policies in Hong Kong, a key financial centre, may change that perception.
ETFs are also a good way to get additional money into crypto because they allow investors to maintain exposure to the market without having to buy any digital assets directly.
