Banking Giant HSBC to Offer Exposure to Crypto ETFs to Customers in Hong Kong

In the latest development, banking giant HSBC announced that it will allow its customer to trade exchange-traded funds (ETFs) for Bitcoin and Ethereum.

This development comes at a time when Hong Kong has been making a serious push of establishing itself as the crypto hub of Asia while broadening access to cryptocurrencies and other derivative products.

The crypto ETFs listed on the Hong Kong exchange include CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF, and Samsung Bitcoin Futures Active ETF. The ETFs, which are like investment products, became available on HSBC Hong Kong's "Easy Invest" mobile app on Monday. These ETFs allow traders to invest in Bitcoin and Ethereum futures, which are contracts based on the value of these cryptocurrencies traded on commodity exchanges.

Popular crypto journalist Colin Wu was the first to report this news who noted: “HSBC, the largest bank in Hong Kong, today allows its customers to buy and sell Bitcoin and Ethereum ETFs listed on the Hong Kong exchange, and is also the first bank in Hong Kong to allow it. The move will expand local users’ exposure to cryptocurrencies in Hong Kong”.

Hong Kong has been embracing cryptocurrencies since the last year ever since the broader cryptocurrency market faced a $1.5 trillion rout last year in the crypto winter of 2022.

However, banking institutions have been a bit reluctant in serving crypto clients, but regulators have been pushing top banks like HSBC and the Standard Chartered to serve crypto clients. HSBC highlighted the potential risks associated with trading these assets, including uncertainties in regulations, concerns about liquidity, and the possibility of money laundering. The bank stated that products related to virtual assets are considered highly speculative, with prices being subject to significant fluctuations in a short period of time.

HSBC's CEO, Noel Quinn, has expressed caution towards cryptocurrencies and stated that the bank has no intention of establishing a cryptocurrency trading desk or offering digital currencies as investment options to customers.

Starting from June 1, Hong Kong has implemented a new regulatory framework for cryptocurrencies. This allows crypto exchanges to provide trading services to individuals and institutions as long as they obtain the required licenses to protect investors from the risks associated with the 2022 market crash.

Additionally, authorities have approved the introduction of exchange-traded funds (ETFs) that invest in Bitcoin and Ether futures traded on the CME Group Inc. Three such ETFs have been launched since mid-December.