Harvest Fund Management Seeks Approval for Hong Kong’s First Spot Bitcoin ETF, While Stablecoin Interest Grows

Harvest Fund Management Seeks Approval for Hong Kong’s First Spot Bitcoin ETF, While Stablecoin Interest Grows

Crypto News – Harvest Fund Management’s Hong Kong branch, a prominent Chinese asset management company, has reportedly submitted an application for a spot Bitcoin exchange-traded fund (ETF) to the local financial regulator. This move signals Hong Kong’s readiness to potentially introduce its first batch of spot cryptocurrency ETFs.

According to Tencent News, Harvest has recently submitted its application for a spot Bitcoin ETF to the Securities and Futures Commission (SFC), with hopes of launching Hong Kong’s inaugural ETF of this kind shortly after the Lunar New Year holiday, which falls on February 10th this year. At the time of reporting, neither Harvest nor the SFC had responded to requests for comment from The Block.

Earlier this month, Livio Weng, the Chief Operating Officer of HashKey, a Hong Kong-based cryptocurrency exchange, mentioned that approximately 10 fund companies have begun exploring the possibility of launching spot crypto ETFs in the city.

Meanwhile, Venture Smart Financial Holdings Ltd. (VSFG), also based in Hong Kong, has announced its intention to launch a spot Bitcoin ETF within the first quarter, as reported by Bloomberg.

In parallel with these developments, there is a growing interest in stablecoins in Hong Kong. Several companies, including Harvest Global Investments, RD Technologies, and VSFG, have expressed their interest in participating in stablecoin-related trials. These firms are reportedly in discussions with the Hong Kong Monetary Authority (HKMA), the de facto central bank of the city, to explore potential stablecoin trials.

Sean Lee, Senior Advisor and Head of Stablecoin at VSFG, expects the stablecoin sandbox process to commence in the first quarter, lasting through the first half of 2024. Lee stated that VSFG is committed to supporting Hong Kong as an international hub for virtual assets, and they plan to apply for inclusion in the sandbox along with consortium partners to showcase the potential of programmable digital currency while adhering to prudential requirements.

An HKMA spokesperson confirmed that the sandbox arrangement is aimed at fiat-reference stablecoin (FRS) issuers who have a genuine interest and a reasonable plan to issue FRS in Hong Kong. The spokesperson added that the HKMA is preparing for the launch of the sandbox and will provide relevant details in due course.

As for Harvest and RD Technologies, they have yet to respond to inquiries made by The Block.

In December, the HKMA, in collaboration with the Financial Services and the Treasury Bureau, published a joint consultation paper indicating that a stablecoin issuer would be required to obtain a license from the authorities if they issue a stablecoin referencing the value of one or more fiat currencies in Hong Kong.

Eddie Yue, the Chief Executive of the HKMA, emphasized that stablecoins could serve as a bridge between traditional finance and the virtual asset market. In a statement from December, Yue highlighted the importance of ensuring the stability of stablecoins, especially if they become a preferred payment option among the general public, as they are expected to further integrate the digital payment ecosystem with the real economy.