Latest news with #SecuritiesAndFuturesCommission
South China Morning Post
4 days ago
- Business
- South China Morning Post
Hong Kong stablecoin regime a ‘double-edged sword' for market's growth, analysts say
Published: 11:00am, 5 Aug 2025 Hong Kong's new stablecoin law sets a global standard but might initially sideline innovative start-ups while encouraging big local and mainland financial firms to participate in the cryptocurrency sector's growth, industry experts said. The city rolled out one of the most stringent stablecoin regimes globally and kick-started the application process for potential issuers on Friday, part of a broader effort to be a leading digital asset hub connected to China's vast economy. The move aims to ensure a prudent approach for the issuance of stablecoins , a type of cryptocurrency backed by fiat currencies or other reserve assets. The regime's upfront capital requirement of HK$25 million (US$3.2 million) presented a barrier for smaller firms, according to Florian Spiegl, founder and CEO of Evident Group, which operates a digital investment platform for alternative assets and is licensed by the Securities and Futures Commission . In addition, a requirement that every applicant be a locally incorporated company with management on the ground added cost and friction for global players, he said. A limited number of issuers would initially emerge in Hong Kong, analysts said. These would primarily be major local and mainland Chinese firms, as some smaller start-ups and fintech innovators would be deterred, they said. 'For applicants, it's a double-edged sword, as the costs of entry and operations are too high for some,' Spiegl said. 'For major banks and large, well-capitalised global crypto firms that want a 'gold standard' licence to minimise risk and signal trust, Hong Kong's tough stance might actually be a draw.' Hong Kong's strict rules contrast with Singapore's base capital requirement of at least S$1 million (US$776,367) and the rules in the US, which just require that the amount be sufficient to ensure ongoing operations.
Yahoo
7 days ago
- Business
- Yahoo
Asia Morning Briefing: SEC's In-Kind BTC, ETH ETF Redemption Shift Happened Years Ago in Hong Kong
Good Morning, Asia. Here's what's making news in the markets: Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Wednesday in the U.S., the Securities and Exchange Commission announced that investors are now allowed to do in-kind redemptions for bitcoin and ether exchange-traded funds (ETFs). The decision lets institutional traders create and redeem ETF shares directly in BTC or ETH, improving efficiency by avoiding fiat conversions. But in Hong Kong, this isn't anything new. In late 2023, during the early days of the regulatory process to bring crypto ETFs to the market (they launched in April 2024), the Securities and Futures Commission – the city's markets regulator – mentioned in a circular that in-kind redemptions would be allowed. Part of the reason why they were allowed was a technical one: ETF issuers were required to partner with licensed local crypto exchanges and use custody solutions. This wasn't the case in Ontario, Canada, which had crypto ETFs first, nor the U.S. In Hong Kong there wasn't the same debate about the status of Ether as a security as there was in the U.S. In contrast, U.S. regulators wrestled with concerns over custody, anti-money laundering risks, and potential market manipulation. While the SEC never explicitly banned in-kind redemptions, ETF sponsors were required to remove them from early filings. The Commission favored a cash-only approach as a cautious first step, citing untested operational processes and uncertainty over how to securely settle large crypto transfers. That stance wasn't without internal pushback. SEC Commissioner Mark Uyeda publicly criticized the agency's approach during the January 2024 approval of spot bitcoin ETFs. He pointed out that commodity-based ETFs, like those backed by gold, routinely use in-kind redemptions and questioned why crypto was being treated differently. Uyeda argued that the SEC failed to explain why it considered cash-only redemptions 'non-novel,' despite the clear deviation from standard ETF practice, and warned that the lack of reasoning set a troubling precedent. The episode highlights how Hong Kong's regulator moved with greater clarity and cohesion from the start as it brought these products to market. By enabling in-kind redemptions early on, and pairing them with strict licensing and custody requirements, the SFC avoided the internal contradictions and policy drift that defined the U.S. rollout. However, there's going to be one side effect from all of this: tracking flows. Crypto data aggregator SoSoValue, which provides daily flow updates for crypto ETFs, warns that "subscriptions of physical bitcoin do not generate cash inflows for the [ETFs], so they cannot be simply counted in daily net inflow statistics." They've tried to create methods and models to work around this, but say they have been unsuccessful so far. So unless ETF issuers in the U.S. publish daily flow in cash and crypto, tracking this metric is going to be an issue. And it's an important one to track, as it shows investor sentiment for the asset class. Market Movements BTC: Bitcoin is trading above $117,500 after a modest rebound, but momentum remains weak as ETF outflows persist, whales take profit near $118K, and macro headwinds, including a firm dollar and hawkish Fed expectations, continue to limit upside. ETH: ETH is trading above $3,700. "Ethereum has proven in parallel with BTC since its inception to be the second most battle-tested network, and very likely institutions now see Ether the token as a formidable asymmetric bet alongside bitcoin," said March Zheng, General Partner of Bizantine Capital, in a note to CoinDesk. Gold: Gold rebounded to $3,334 on Tuesday, snapping a four-day losing streak ahead of the Fed meeting, as traders priced in steady rates despite weak U.S. job data Nikkei 225: Asia-Pacific markets opened mixed as U.S. Commerce Secretary Howard Lutnick confirmed Trump's Friday tariff deadline will proceed as planned, with Japan's Nikkei 225 flat at the open. S&P 500: U.S. stocks closed lower Tuesday, with the S&P 500 ending a six-day record streak, as investors weighed earnings, economic data, and the upcoming Fed rate decision. Elsewhere in Crypto: Tornado Cash Developer Roman Storm Will Not Take the Stand, Lawyers Say (CoinDesk) Cornell Tech Professor Warns AI Agents And Crypto Spell Trouble (Bloomberg) Sen. Lummis introduces bill requiring Fannie Mae and Freddie Mac to consider crypto as an asset for mortgages (The Block)
South China Morning Post
01-08-2025
- Business
- South China Morning Post
Southbound capital flow into Hong Kong stocks hits record in first 7 months of 2025
Southbound capital flowing into the Hong Kong stock market hit an all-time high in the first seven months of 2025, reflecting investor confidence in the city on the back of surging turnover and a revived pipeline of initial public offerings (IPOs). Advertisement Mainland Chinese investors snapped up more Hong Kong equities so far this year than in all of 2024, as southbound flows hit HK$866.8 billion (US$110.4 billion) up to July, according to data compiled by Wind. That was already 107 per cent of last year's total. The sharp increase in mainland buying came as trading and fundraising activity in the city rebounded strongly after a multi-year slump. The southbound trades via the Stock Connect programme accounted for 23.1 per cent of total turnover on the Hong Kong stock exchange in the first six months of 2025, up from 18.3 per cent from a year earlier, according to a midyear review released by the Securities and Futures Commission (SFC) on Thursday. Net purchases via the southbound channel during the first half of the year reached HK$731.2 billion – equivalent to 91 per cent of the total for all of 2024, the report showed. All told, the southbound scheme brought in HK$4.42 trillion as of the end of June 30 since its inception, according to the report. By contrast, in the northbound channel, the average daily turnover fell to 171.3 billion yuan (US$23.8 billion) in the first half of this year, with its share of total mainland market turnover dipping to 6.3 per cent from 7.1 per cent a year earlier. Advertisement Kenny Ng, a strategist at Everbright Securities International, said the inflow trend was likely to persist as structural factors continue to drive demand.
Yahoo
30-07-2025
- Business
- Yahoo
Asia Morning Briefing: SEC's In-Kind BTC, ETH ETF Redemption Shift Happened Years Ago in Hong Kong
Good Morning, Asia. Here's what's making news in the markets: Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Wednesday in the U.S., the Securities and Exchange Commission announced that investors are now allowed to do in-kind redemptions for bitcoin and ether exchange-traded funds (ETFs). The decision lets institutional traders create and redeem ETF shares directly in BTC or ETH, improving efficiency by avoiding fiat conversions. But in Hong Kong, this isn't anything new. In late 2023, during the early days of the regulatory process to bring crypto ETFs to the market (they launched in April 2024), the Securities and Futures Commission – the city's markets regulator – mentioned in a circular that in-kind redemptions would be allowed. Part of the reason why they were allowed was a technical one: ETF issuers were required to partner with licensed local crypto exchanges and use custody solutions. This wasn't the case in Ontario, Canada, which had crypto ETFs first, nor the U.S. In Hong Kong there wasn't the same debate about the status of Ether as a security as there was in the U.S. In contrast, U.S. regulators wrestled with concerns over custody, anti-money laundering risks, and potential market manipulation. While the SEC never explicitly banned in-kind redemptions, ETF sponsors were required to remove them from early filings. The Commission favored a cash-only approach as a cautious first step, citing untested operational processes and uncertainty over how to securely settle large crypto transfers. That stance wasn't without internal pushback. SEC Commissioner Mark Uyeda publicly criticized the agency's approach during the January 2024 approval of spot bitcoin ETFs. He pointed out that commodity-based ETFs, like those backed by gold, routinely use in-kind redemptions and questioned why crypto was being treated differently. Uyeda argued that the SEC failed to explain why it considered cash-only redemptions 'non-novel,' despite the clear deviation from standard ETF practice, and warned that the lack of reasoning set a troubling precedent. The episode highlights how Hong Kong's regulator moved with greater clarity and cohesion from the start as it brought these products to market. By enabling in-kind redemptions early on, and pairing them with strict licensing and custody requirements, the SFC avoided the internal contradictions and policy drift that defined the U.S. rollout. However, there's going to be one side effect from all of this: tracking flows. Crypto data aggregator SoSoValue, which provides daily flow updates for crypto ETFs, warns that "subscriptions of physical bitcoin do not generate cash inflows for the [ETFs], so they cannot be simply counted in daily net inflow statistics." They've tried to create methods and models to work around this, but say they have been unsuccessful so far. So unless ETF issuers in the U.S. publish daily flow in cash and crypto, tracking this metric is going to be an issue. And it's an important one to track, as it shows investor sentiment for the asset class. Market Movements BTC: Bitcoin is trading above $117,500 after a modest rebound, but momentum remains weak as ETF outflows persist, whales take profit near $118K, and macro headwinds, including a firm dollar and hawkish Fed expectations, continue to limit upside. ETH: ETH is trading above $3,700. "Ethereum has proven in parallel with BTC since its inception to be the second most battle-tested network, and very likely institutions now see Ether the token as a formidable asymmetric bet alongside bitcoin," said March Zheng, General Partner of Bizantine Capital, in a note to CoinDesk. Gold: Gold rebounded to $3,334 on Tuesday, snapping a four-day losing streak ahead of the Fed meeting, as traders priced in steady rates despite weak U.S. job data Nikkei 225: Asia-Pacific markets opened mixed as U.S. Commerce Secretary Howard Lutnick confirmed Trump's Friday tariff deadline will proceed as planned, with Japan's Nikkei 225 flat at the open. S&P 500: U.S. stocks closed lower Tuesday, with the S&P 500 ending a six-day record streak, as investors weighed earnings, economic data, and the upcoming Fed rate decision. Elsewhere in Crypto: Tornado Cash Developer Roman Storm Will Not Take the Stand, Lawyers Say (CoinDesk) Cornell Tech Professor Warns AI Agents And Crypto Spell Trouble (Bloomberg) Sen. Lummis introduces bill requiring Fannie Mae and Freddie Mac to consider crypto as an asset for mortgages (The Block) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
South China Morning Post
13-07-2025
- Business
- South China Morning Post
Hong Kong's digital-asset strategy aims to solve ‘real economy problems', Chris Hui says
Hong Kong's push for stablecoins and tokenised assets aims to solve global economic challenges, positioning the city as a leading fintech hub Hong Kong will facilitate more use cases for stablecoins and other tokenised financial products, part of the city's effort to build a trusted and sustainable digital-asset market that can tackle real-world economic problems, said the architect of the strategy. Eleven cryptocurrency exchanges have been licensed by the Securities and Futures Commission to operate in Hong Kong, a sea change over three short years after a raft of policies, regulations and guidelines were put in place to put the city on the leading edge of financial technology. More initiatives are in the works, said the Secretary for Financial Services and the Treasury Bureau, Christopher Hui, as Hong Kong becomes the crucible for testing the best global technological solutions for real-world problems. Hong Kong charts new phase as digital asset hub with policy blueprint, says FSTB chief Chris Hui 'Finance serves the purpose of easing the smooth operation of the real economy, the value chain, the movement of goods and services, and the transfer of assets and products,' Hui said last week during an interview with the Post. 'I would try to cast our sights even further: it is about Hong Kong [as] a value creator [and] a solution provider for some real economic issues and challenges in the region and across the world.' This was the first time that Hui, an Oxford-educated economist before he entered public service in 1999, laid out the government's strategy across the entire spectrum of digital assets, from cryptocurrencies to stablecoins to central bank digital currencies. Based on the principle that similar rules should apply to similar risks, his bureau has formulated regulations for four 'blocks' of digital assets: exchanges, stablecoin issuers, dealing service providers and custodians. The latter two are now part of the legislative proposals in consultation, which is expected to close at the end of next month to address investors' needs for sourcing liquidity, block trading and asset safekeeping. A currency exchange in Causeway Bay with a bank vault painted on its gate on May 5, 2024. Photo: Jelly Tse. It would also conduct a systematic review of Hong Kong's legislation to assess its support for smart contracts, as the blockchain feature underpins various financial innovations, Hui said. The goal is to identify ways to enhance benefits, particularly in less liquid asset trading and higher access thresholds, which would require appropriate legal provisions and support, he said. Newsletter Daily, Monday to Friday China at a Glance By submitting, you consent to receiving marketing emails from SCMP. If you don't want these, tick here {{message}} Thanks for signing up for our newsletter! Please check your email to confirm your subscription. Follow us on Facebook to get our latest news. The proactive use of Hong Kong for 'pilot programmes' in financial innovations 'would be very worthwhile,' said Huang Yiping, the dean of Peking University's National School of Development, during an interview with on July 2. The government would regularise the issuance of tokenised government bonds after shortening the settlement time to one day from five, Hui said. More financial assets can be sold as tokens, including gold, renewable energy projects and property, he said. A girl flying a kite at the waterfront of West Kowloon Cultural District on February 15, 2023. Photo: Sam Tsang 'The essence of blockchain is that it can reduce the need for intermediaries, allowing the transfer of money, products or assets to be seamless,' said Hui. 'We need to be focused on pain points while identifying areas where technology can maximise its benefits.' For example, stablecoins, or tokens pegged to a fiat currency, could facilitate greater innovation in cross-border payments and trade finance, especially in countries where currencies are prone to the risks of inflation and devaluation. If and when stablecoins are issued in Hong Kong, based on the law effective as of August 1, the city could help address the issue. 'We are helping the world to solve a problem which people outside Hong Kong are facing, with a financially regulated product here in Hong Kong,' Hui said. A press conference for the sale of the Silver Bond 2024 campaign at Tamar on September 10, 2024. Photo: Eugene Lee Responding to whether Hong Kong's proactive stance on stablecoins and blockchains could be replicated in mainland China, Hui said the two systems faced different challenges, issues and operated differently. 'It's very hard to extrapolate, saying that whatever we do is going to be replicable across the country, because, after all, [we are] two systems,' he said. Hong Kong could facilitate financial innovations based on its strong foundation under the common law, a very internationalised and business-friendly environment, Hui added. Hong Kong is now 'not merely a testing ground for digital assets', but is transitioning towards increasing institutionalisation, scaling and globalisation, said HashKey Group's chairman and CEO Xiao Feng on June 26 after the unveiling of Hong Kong's digital assets policy. One of the world's largest cryptocurrency events, Bitcoin Asia, will take place in Hong Kong for the second consecutive year next month. This year, Eric Trump, the second-born son of US President Donald Trump, will attend as a headline speaker, as the city seeks to cement its role as a global digital asset hub, competing with the US. Asked to comment on the younger Trump's attendance, Hui said he sees 'these conferences as very good occasions where we can showcase the world … in particular, using Hong Kong's advantages as an international financial centre.'
