Hong Kong’s Finance Secretary Christopher Hui has emphasized the innovative in-kind subscription and redemption features of the city’s six spot crypto exchange-traded funds (ETFs), providing investors with greater flexibility. This initiative is part of Hong Kong’s broader strategy to position itself as a leading regional hub for cryptocurrency.
In a blog post released Tuesday, Hui detailed his recent efforts to promote Hong Kong’s web3 policies during visits to several European forums. He emphasized the government’s commitment to regulating crypto and tokenization, demonstrating its proactive stance in the rapidly evolving digital asset space.
“In terms of product innovation, the first batch of six virtual asset spot ETFs in Asia were listed in Hong Kong in April. Notably, Hong Kong pioneered an in-kind redemption mechanism that offers investors greater flexibility when subscribing to and redeeming units of virtual asset ETFs,” Hui stated.
Despite these advancements, the performance of Hong Kong’s spot crypto ETFs lags behind their U.S. counterparts. On Tuesday, the three Hong Kong spot bitcoin ETFs recorded a total daily trading volume of $6.67 million, following volumes of $2.35 million on Friday and $6.08 million on Thursday. In contrast, the 11 spot bitcoin ETFs in the U.S. saw a total trading volume of $1.1 billion on Monday, and $2.51 billion on Friday.
Hong Kong regulators and industry stakeholders are currently exploring the potential inclusion of staking within spot ether ETFs. This feature could provide a “competitive edge,” according to Yat Siu, Chairman of Animoca Brands, who expressed optimism that such developments could occur within the year.
In addition to these innovations, Hui noted that the government issued the second batch of multi-currency tokenized bonds earlier this year, amounting to $770 million. This issuance represents the world’s first digitally native multi-currency government green bonds, further cementing Hong Kong’s leadership in digital finance.