- Hong Kong struck first in the Asian race for easy-to-trade crypto funds.
- Other Asian nations are approaching Bitcoin ETFs in very different ways.
- Singapore is resistant to the investment products changing crypto.
Ever since the US approved Bitcoin ETFs earlier this year, investors have been looking for the next markets to green-light these easy-to-buy and easy-to-trade investment products.
Hong Kong struck first, with regulators approving spot Bitcoin and spot Ether exchange-traded funds on April 15.
Which Asian nation will be next?
There’s been a mixed response from regulators in the rest of the continent. Here’s a run down of the state of play in Asia.
Taiwan
Taiwan’s incoming president, Lai Ching-te will take office next month. The former doctor has previously advocated for the development of both the AI and blockchain industry in Taiwan and last year his party began laying the groundwork for more cryptocurrency legislation.
At present, crypto companies in Taiwan are proposing they regulate themselves. They’ve formed an association of companies that will form this self-regulating body.
‘People were debating this on both sides, which is testament to how big the industry has become.’
— Abel Seow, BitGo
They’ve also come out to say they would like the regulators and government officials to consider approving or allowing for a spot Bitcoin ETF to take place in Taiwan.
The local Chamber of Commerce is also set to release a study on the feasibility of the ETFs this month.
South Korea
The South Korean won surpassed the US dollar as the most-used currency for trading crypto in the first quarter of this year, according to Kaiko. Centralised exchanges in the country traded more than $456 billion in volume in the same period.
With higher adoption rates, the outlook for ETF approval is cautiously optimistic following the recent parliamentary elections.
“People were debating this on both sides, which is testament to how big the industry has become and how central it is to winning votes even,” Abel Seow, sales director APAC at BitGo told DL News.
While officials initially ruled out the possibility of a spot Bitcoin ETF in January, politicians and regulators have gone back and forth on the issue.
During the election campaign, both major parties indicated they were open to the idea of allowing a spot Bitcoin ETF. The People Power Party later retracted their initial support but lost the election to the Democratic Party.
The upcoming implementation of South Korea’s Virtual Asset User Protection Act in July 2024 will grant more supervisory powers to financial authorities, which could pave the way for the ETFs.
Japan
The Japanese government’s recent approval of a bill allowing investment and venture capital funds to acquire cryptocurrencies suggests a willingness to integrate digital assets into the broader financial system.
At present, crypto ETFs are banned in the country but there is some support from crypto advocates to lobby for a change.
Current prime minister Fumio Kishida has on various occasions said he wants to turn Japan into a web3 hub as well as a wealth management centre.
The Government Pension Investment Fund in the country has also said it was looking into allowing crypto into their long-term asset allocation — although BitGo’s Seow cautioned that the results of that might not be seen for years.
“That could mean in five years, 10 years, no one knows. But the fact that they’ve come out to say that they’re doing the work on it is quite interesting,” he said.
Thailand
Despite the current administration’s pro-crypto stance, Thailand remains one of the more conservative jurisdictions in Asia regarding spot Bitcoin ETFs.
The Thai Securities and Exchange Commission has explicitly stated that it does not plan to permit these ETFs for the time being.
However, a nuanced approach is visible in its recent decision to allow private funds for US spot Bitcoin ETFs for institutional investors and high-net-worth individuals.
Singapore
Singapore has positioned itself firmly against the introduction of the US spot Bitcoin ETFs for retail investors for the time being, and ruled out the possibility of a local product.
This decision reflects broader concerns over the volatility and regulatory complexities associated with cryptocurrency investments.
The Monetary Authority of Singapore is prioritising investor protection amidst the burgeoning interest in these new asset classes.
“If there is something down the road that would be commercially viable and politically viable, I don’t see why the regime would not change their mind,” said Seow.
Callan Quinn is DL News’ Hong Kong-based Asia Correspondent. Get in touch at callan@dlnews.com.