Sometimes life requires you to test before you drive confidently. And in crypto world nations watch each other before taking the risk. This way they use each other like a sandbox. In case of crypto spot ETF the nations are watching each others progress. Hong Kong did the same and they opened up after seeing the progress of USA.
Currently they are in a mode that they are saying we are prepared to accept the applications for the spot ETF. So they are not completely up with the infrastructure as of yet and also the regulation and the requirements part is not final and still in monetary terms as of now.
Let's check out how hong kong's move of accepting spot crypto ETF would go. We will discuss how this would affect consumers and business.
HK Securities and Futures Commission (SFC) Circular
Like any other SEC and the financial monitoring organization in the world, hong kong too has the issue of the regulations and so they are coming up with the requirement and strict guidelines too. Here you can see SEC has decided to build up before things go south. So they are learning from other nations who did the spot ETF. Here's the circular for you to check the requirements.
In one of the first criteria is that anyone who wishes to build the ETF is supposed to be licensed by the SFC for the similar actions earlier before they can apply. Same with the financial institutions who wants to build on the virtual asset trading platforms. This way they want to avoid the rug pulls on the nations levels and avoid any such fly by night local or international entities.
Crypto Adoption in Hong Kong
When it comes to the crypto adoption like I mentioned each nations look upto each other. And they pick and choose what to approve and what to regulate. Some of the nations pay attention to things that are going wrong. Hong kong is taking the steps in a consumable way and that is what is reflecting in their actions towards consultation they wish to take for crypto adoption.
If you check their policy documents online you would understand that they are going to be pushing for the adoption in a step wise way. There will be licenses and also variety of compliance for trading, exchanges and also while holding the digital assets like the ETF. So it is all going to be in the way that the nations are going to regulate and allow us to consume as it fits the requirements.
Let's get Realistic, ETF vs Decentralized Holding
I am giving my own verdict on this whole ETF saga. I am not a fan of the SPOT crypto and the variety of ETF that are coming as per the cryptocurrency. People however don't trust centralized instruments for anything long term. You can see that this goes to show that like me there are many who are into the decentralized and they hold bitcoin on their own and not depend on the funds and centralized instruments.
There are some finance firm VSFG like who are applying for the initial applications of the ETF. But we have a long way to go on the note of the SPOT Crypto ETF where things are going to change the market and also consumers would change their habits and there would be no centralized issue in near future for them. Which we have to wait and see as the nations like china, korea become more liberal on this.
Hong Kong has been pushing for the variety of the crypto changes in the market. And there would be some really good changes coming up as the centralized market gets into blockchain and ETF market.