Hong Kong has expressed keen interest in securing approval for a bitcoin ETF, and analysts suggest that the recent U.S. approval could expedite similar regulatory processes in Asia.
The long-awaited approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) is expected to provide significant momentum for regulatory approvals in and around Asia. Analysts acknowledge that some regions may face challenges in immediately establishing ideal policies, but the U.S. approval is seen as a catalyst for progress.
U.S.-based industry analysts have expressed concerns that without clear and favorable regulatory policies for the crypto space, the nation might miss opportunities. The U.S. approval of spot bitcoin ETFs positions it ahead of Asia and Africa, where the European Union and other nations already have bitcoin ETF products.
Jurisdictions in and around Asia have actively sought to become crypto hubs, with expectations for a bitcoin ETF higher in these regions compared to Africa. While the UAE, Singapore, and Hong Kong have framed policies to attract retailers and financial institutions to the crypto space, none have yet granted regulatory approval for a bitcoin ETF-like product.
According to discussions with numerous analysts and industry participants, a majority anticipate that Australia will likely be the next country to approve spot bitcoin ETF products. Hong Kong has shown considerable interest in achieving a bitcoin ETF approval, and the recent U.S. approval is expected to expedite similar processes for various jurisdictions in the region.
With the U.S. allowing nearly a dozen products to launch, other countries such as the U.K., Hong Kong, Singapore, and Japan may introduce policies to prevent large and medium-sized financial institutions from transferring funds out of their regions, according to Ryan Lee, Chief Analyst at Bitget Research.
Australia is currently leading the race, with approval from the Australian Securities Exchange (ASX) expected in the first or second quarter of 2024. The Monochrome Bitcoin ETF, which applied in July 2023, positions Australia at the forefront. While Australia already has two exchange-traded products on Cboe Australia, there is heightened excitement over the potential for a similar product to trade on the larger ASX, given its larger volumes.
The Australian Securities and Investment Commission (ASIC), the market regulator that effectively allowed such products in 2022, is overseeing the regulatory landscape. Monochrome Asset Management anticipates the Monochrome Bitcoin ETF to be quoted in the second quarter of this year.
Derek Vladimir Henningsen, General Counsel, and Head of Legal and Compliance at Monochrome Asset Management, notes that the ASX is likely to be a fast follower, and the U.S. approval may provide assurance to the ASX. While the number of applicants for a spot-bitcoin ETF-like product in Australia is not publicly disclosed, reports indicate a lineup of Bitcoin ETFs awaiting approvals from the ASX.
The Australian Securities Exchange (ASX) is poised to approve an exchange-traded fund linked to the price of bitcoin in the first half of this year, as reported. ASIC and ASX, falling under ASIC, are responsible for licensing and approval. Monochrome has already obtained a license from ASIC through a separate entity, Vasco Trustees Limited.
An ASIC spokesperson emphasizes that market operators, currently ASX and CBOE, must be comfortable that a product meets their operating rules and procedures. An ASX spokesperson mentions that the rules were amended in August 2022 to allow crypto ETFs and continues to engage with several issuers interested in admission while refraining from commenting on investment product applications.