- Hong Kong banks wary of virtual asset ETFs due to regulations.
- Institutional investors show growing interest in virtual assets.
- Low trading volume for Hong Kong virtual asset ETFs despite regulatory stability.
Hong Kong’s foray into the virtual asset ETF market faces challenges, as traditional banks exercise caution amid regulatory concerns and talent shortages. Over a month since the listing of Hong Kong’s virtual asset spot ETF, banks have yet to participate in distribution.
Chris Barford, Head of Financial Services Consulting at Ernst & Young Hong Kong, attributed the hesitation among traditional banks to concerns over anti-money laundering (AML) and know-your-customer (KYC) regulations. Additionally, a lack of technical expertise further deters their participation in product distribution.
While mainstream brokerages have distributed virtual asset spot ETFs, banks operate under different regulatory entities, requiring permissions and internal assessments for compliance. Barford emphasized the importance for traditional financial institutions to ensure regulatory adherence, particularly in AML and KYC protocols.
Despite regulatory hurdles, institution…
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