Hong Kong's largest bank allowed to trade shares of cryptocurrency ETFs

Hong Kong's largest bank allowed to trade shares of cryptocurrency ETFs

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Author: Robert Strickland (crypto-journalist)
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Hong Kong's largest bank allowed to trade shares of cryptocurrency ETFs
Hong Kong Bank HSBC has allowed customers to trade shares of cryptocurrency ETFs
Buying shares of four cryptocurrency exchange-traded funds will be available to users through official trading apps

Hong Kong's largest bank, HSBC, has allowed customers to buy and sell shares of exchange-traded funds (ETFs) for bitcoin (BTC) and Ethereum (ETH) listed on the Hong Kong Exchange, becoming the first bank in Hong Kong to officially approve the service. This was reported by journalist Colin Wu, citing internal bank documents. According to him, such a move will expand opportunities for local users to work with cryptocurrencies.

Several cryptocurrency ETFs are currently registered in Hong Kong: CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF, and Samsung Bitcoin Futures Active ETF. They are all futures-based funds, an approach that differs from that of the U.S. investment company BlackRock, which announced the launch of a Bitcoin spot ETF.

Bitcoin Trust and spot bitcoin ETFs are products that track the real price of bitcoin. Their point is for investors to access BTC through a regulated and familiar product without actually owning Bitcoin.

Futures-based exchange-traded funds differ from spot funds in that they offer investors access to futures contracts rather than to an asset.

When you buy units of a spot fund, unlike futures products, you are actually buying bitcoin in the market. If big players show interest in such a product, it could have an impact on the price of the asset.

At the same time, HSBC launched an educational portal for digital asset investors (Virtual Asset Investor Education Centre). Before trading, users will need to familiarize themselves with basic concepts and information about the risks involved. The trading service will then be available to them on the HSBC HK Easy Invest app, HSB CHK Mobile Banking, and online banking.

In 2022, Hong Kong authorities set out to legalize retail transactions in digital currencies, encourage locally licensed crypto-businesses, and launch new assets linked to the price of cryptocurrencies on official trading platforms. In March of this year, it was reported that Hong Kong units of mainland Chinese banks were considering options to provide services to cryptocurrency companies amid tight restrictions by U.S. regulators.

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