The runner-up race for spot Bitcoin ETF issuers may see Hong Kong facing challenges from the Southern Hemisphere
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The runner-up race for spot Bitcoin ETF issuers may see Hong Kong facing challenges from the Southern Hemisphere
The U.S. Securities and Exchange Commission (SEC) has approved spot Bitcoin ETFs, a significant move that has spurred interest in Asia and surrounding regions regarding the potential approval of similar asset funds.
Navigating Web3 tides with focused insightsBy Amitoj Singh, CoinDesk
Translated by Sean, Techub News
The U.S. Securities and Exchange Commission (SEC) has approved spot bitcoin ETFs, a significant move that has sparked discussions across Asia and neighboring regions about the potential approval of similar asset funds. Multiple analysts say that even if certain regions may not establish ideal regulatory frameworks in the short term, this development still provides valuable reference and insights for regulating their own products.
For some time, industry analysts and experts in the U.S. have warned that without clear, forward-looking regulation in the cryptocurrency sector, the United States risks missing out on the growth opportunities brought by crypto—essentially "missing the high-speed train." However, the U.S. has now taken a lead over regions like Asia and Africa in approving spot bitcoin ETFs (the EU and several other countries already offer such products).
In Asia and surrounding areas, competition to become a cryptocurrency hub is intensifying, leading to relatively high public expectations for spot bitcoin ETFs—expectations that are comparatively lower in Africa. The UAE, Singapore, and Hong Kong have implemented varying policies to attract crypto retailers and financial institutions. Yet, so far, regulators in these regions have not approved products similar to spot bitcoin ETFs.
Among the dozen or so analysts and industry participants interviewed by CoinDesk, most believe Australia is likely to be the next country to approve a spot bitcoin ETF. Meanwhile, Hong Kong has shown strong interest in approving such products and may accelerate its legal and regulatory processes under the influence of the U.S. approval.
Analyst Ryan Lee said that since the U.S. has already approved over a dozen spot bitcoin ETF products, other jurisdictions—including the UK, Hong Kong, Singapore, and Japan—can now develop and implement corresponding policies to prevent mid- and large-sized financial institutions from moving capital overseas.
Australia Takes the Lead
Liam Hennessy, a Brisbane-based lawyer at Clyde & Co., said Australia could become one of the first countries to launch a spot bitcoin ETF on the Australian Securities Exchange (ASX), with trading expected to begin smoothly in the first or second quarter of 2024.
In an interview with CoinDesk, Hennessy said Australia has advanced further than Hong Kong and Singapore in developing spot bitcoin ETFs. Since July 2023, Monochrome’s spot bitcoin ETF application has led the queue in Australia.
Australia already offers two exchange-traded products that provide investors access to spot crypto assets via the Cboe Australia exchange.
However, Australian industry experts note that Cboe Australia and the ASX are competitors. Listing spot bitcoin ETFs on the ASX would undoubtedly generate greater investor enthusiasm due to its significantly larger trading volume, which is why expectations remain high.
The Australian Securities and Investments Commission (ASIC), the market regulator, effectively granted permission for such products back in 2022.
Derek Vladimir Henningsen, general counsel and head of legal and compliance at a digital asset management firm, told CoinDesk he expects Monochrome Asset Management’s spot bitcoin ETF to list in the second quarter of this year. He noted that the ASX has responded swiftly on the issue, a stance that is somewhat justified given that U.S. approvals may provide a degree of reassurance to the ASX.
Both Hennessy and Henningsen said the number of applicants for spot bitcoin ETFs in Australia has not been disclosed. According to the Australian Financial Review, product applications are currently awaiting regulatory review.
Reports indicate the ASX plans to approve and list a bitcoin-linked ETF in the first half of this year.
ASIC and the ASX are responsible for licensing and listing, respectively. Monochrome has already obtained authorization from ASIC through its subsidiary Vasco Trustees Limited.
An ASIC spokesperson said the final step requires the spot bitcoin ETF quoting providers—currently Cboe Australia and the ASX—to confirm that the relevant products meet their operational rules and procedures.
The regulator updated its rules in August 2022 to permit the listing of spot crypto ETFs. It continues to engage with interested issuers while making clear it will not comment on individual product applications.
Hennessy said some institutions may have already submitted applications without publicly disclosing them. Additionally, many others are applying to set up closed-end funds or private ETFs that invest in digital assets traded in private markets.
Hong Kong, Singapore, and the UAE
Hong Kong, Singapore, and the UAE all aim to compete for status as global cryptocurrency hubs, yet none has launched a spot bitcoin ETF in their respective regions.
Johnny Ng, a Hong Kong legislative councilor and active crypto advocate, said immediately after the U.S. approval that Hong Kong should boldly become a "leader" in virtual assets and "advance the use of spot cryptocurrencies," urging a swift launch of related ETFs.
Hong Kong is striving to solidify its position as a crypto hub by introducing a new licensing regime that allows crypto exchanges to operate in a more regulated manner. Meanwhile, relevant authorities are actively exploring the possibility of launching spot crypto ETFs.
HB Lim, Managing Director for Asia-Pacific at BitGo—the custodian for Hashdex, one of the spot bitcoin ETF applicants—said Hong Kong is poised to be the next jurisdiction to approve a spot crypto ETF listing.
Lim previously held regulatory roles at Singapore’s central bank and Abu Dhabi’s global financial regulator for 13 years. He said the U.S. approval of such ETFs might help overcome challenges faced by family offices and high-net-worth individuals in intergenerational wealth transfer. The question of why family offices have not yet allocated crypto in their portfolios remains an important one.
Lim added that compared to Singapore and the Middle East, Hong Kong boasts an outstanding reputation as a financial center, with the deepest capital markets and largest stock exchange. Combined with its strategic role in the Greater Bay Area and the Hong Kong government’s open support for Web3 and related fields, Hong Kong is bound to attract more institutions interested in launching spot crypto ETFs.
Singapore seeks to balance innovation with regulation, aiming to drive technological progress without fueling speculation—a sign of both enthusiasm and caution toward crypto. Analysts believe the U.S. regulator’s approval of ETFs could be a key factor influencing the launch of spot bitcoin ETFs in Singapore.
Danny Lim, contributor at MarginX—a decentralized derivatives trading infrastructure—said Singapore aims to attract large investment flows from markets including the U.S., where capital currently moves in response to U.S. market and policy shifts.
A spokesperson for the Monetary Authority of Singapore (MAS) said spot bitcoin ETF products are not yet open to retail investors and reiterated a warning for anyone considering buying such ETFs in overseas markets to exercise extreme caution.
Angela Ang, Senior Policy Advisor at blockchain data provider TRM Labs, said Singapore has long maintained a high level of vigilance regarding speculative retail trading. Potential ETF issuers in Singapore must address the concerns raised by MAS, which presents a challenge.
Angela Ang added that potential issuers need to demonstrate deep understanding and problem-solving capabilities. They must carefully analyze retail demand and MAS’s specific requirements to propose solutions that satisfy all parties involved.
A former senior executive at a UAE financial free zone authority said, “The UAE is the least likely region to immediately roll out spot bitcoin ETF-like products. Overall, conditions for launching such ETFs in the UAE and broader MENA region are not yet mature. Achieving this would require sufficient market liquidity from traditional financial players, who currently lack substantial engagement with the UAE market.” The former executive requested anonymity due to current job constraints preventing media commentary.
He further explained that if investors want to leverage TradFi, they need access to regions with high TradFi liquidity. However, the UAE faces challenges in capital flows. Even if UAE authorities approved a spot bitcoin ETF, international investors—for example, from India or the UK—would need to establish business relationships with members of local exchanges like the Dubai Financial Market to participate.
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