Hong Kong Puts Its Money Where Its Mouth Is With HSBC ETF Move
Hong Kong's pressure on financial institutions appears to be bearing fruit for the crypto sector.
HSBC will allow its customers to gain exposure to crypto via a range of ETFs trading on the Stock Exchange of Hong Kong.
Despite what has been reported, this will not involve the creation of new ETFs. Instead, the Hong Kong branch of HSBC will provide access to crypto ETFs that already trade on the stock exchange, including CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF and Samsung Bitcoin Futures Active ETF. These ETFs all rely on Bitcoin futures products listed on the Chicago Mercantile Exchange (CME), and were launched at the end of 2022 and beginning of 2023.
Since these are not new ETFs, this is not the seminal moment that some reporting makes it appear. However, HSBC is the first bank in Hong Kong to allow this, and Hong Kong is the only country in the region that allows institutional investors access to crypto in this way.
Hong Kong: Crypto Friendly
Unlike mainland China, Hong Kong has adopted a crypto-friendly stance and is positioning itself as a crypto hub. The government has even reportedly put pressure on banks to work with crypto companies—in stark contrast to the US, where Operation Choke Point 2.0 is pushing many crypto businesses out. The Hong Kong authorities even invited Coinbase to set up in the region, since the SEC was making it so difficult for them to do business in the US.
HSBC's response to crypto, meanwhile, has been mixed. Earlier this year, the bank stopped its UK customers from buying crypto using their credit cards, citing fraud risk.
However, it seems that Hong Kong really is serious about embracing crypto and encouraging financial institutions to work with exchanges and other crypto companies. This can only be a net positive for the crypto sector, even if the US is actively driving business away.
Hong Kong's move has even raised hopes that China might soften its stance on crypto. Over the years, China has taken a range of measures to crush the crypto sector, including banning Bitcoin miners in 2021, forcing many to leave for the US.
More broadly, authorities in the region appear to recognize that the US's desperation to control crypto presents an opportunity for any forward-thinking country.
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