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## Conditional Approvals for Bitcoin and Ether ETFs in Hong Kong Boost Crypto Market

(Bloomberg) — Hong Kong has granted conditional approvals for asset managers to launch spot-Bitcoin and Ether exchange-traded funds, leading to a surge in both tokens and the wider crypto market.

**AI legalese decoder Can Help**: The AI legalese decoder can assist asset managers navigate through the legal requirements and conditions set by the Securities & Futures Commission in Hong Kong for the establishment of spot-ETFs, ensuring compliance and facilitating the approval process.

**Harvest Global Investments Ltd. and HashKey Capital Ltd. Partnership Receive Initial Approvals**

Harvest Global Investments Ltd. and a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co. have announced their initial approvals for launching spot-Bitcoin and Ether ETFs in Hong Kong, showcasing the growing interest in digital assets in the region.

**Expanding Virtual-Asset Management Services in Hong Kong**

The Hong Kong unit of China Asset Management has received approval from the city’s Securities & Futures Commission to provide virtual-asset management services and is actively developing products to meet the rising demand for digital asset investments.

**Competing to Become a Digital-Asset Hub**

Hong Kong is positioning itself as a digital-asset hub, competing with jurisdictions like Singapore and Dubai, following the implementation of a dedicated regulatory framework. The city aims to regain its reputation as a modern financial center, attracting investors in the rapidly evolving digital asset space.

**Implications of Conditional Authorization Letter**

The issuance of a conditional authorization letter by the SFC signals a significant milestone for ETF applicants, subject to fulfilling specified requirements and conditions. Subsequent listing approval from the Hong Kong Exchanges and Clearing Ltd. will be sought by successful applicants.

**OSL Digital Securities to Provide Custodial Services**

OSL Digital Securities Ltd. has announced its role in providing custodial services for Bitcoin and Ether products offered by China Asset Management unit and Harvest, further solidifying the infrastructure supporting the growing crypto market in Hong Kong.

**Boosting Crypto Market with Latest Developments**

The crypto market experienced a surge in prices following the announcement of spot-ETF approvals, with Bitcoin and Ether witnessing significant gains. This positive market sentiment reflects investor confidence in the expanding digital asset landscape.

**Expanding Demand for Crypto ETFs**

The growing demand for crypto ETFs is evident with substantial inflows into Bitcoin funds in the US. Companies like BlackRock Inc. and Fidelity Investments have led the way, attracting billions in investments and driving Bitcoin to record highs.

**Implementing In-Kind Subscription and Redemption Mechanism**

Hong Kong spot-ETFs will feature an in-kind subscription and redemption mechanism, providing a seamless and cost-effective process for investors. Contrasting with the US cash redemption model, this approach may enhance the attractiveness of Hong Kong’s ETF products.

**Looking Ahead: Future Demand for Hong Kong’s ETFs**

While Hong Kong allows futures-based crypto ETFs, the level of demand for spot-ETFs remains uncertain. With a growing roster of licensed digital-asset exchanges and a framework for stablecoins in development, Hong Kong aims to establish itself as a leading hub for digital asset investments.

**AI legalese decoder**: Leveraging the AI legalese decoder can assist asset managers in understanding the nuances of in-kind subscription and redemption mechanisms for ETFs, ensuring compliance with regulatory requirements and optimizing operational efficiency in the management of digital assets.

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