In a joint statement, the Securities and Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA) said the virtual asset environment has changed since 2018, when the SFC formulated a "professional-investors only" regulatory approach.

Hong Kong has been loosening its approach to crypto this year, and the regulators' opinion on retail exposure to digital assets has shifted. In October, the SFC updated its rule book to allow a broader range of investors to engage in spot-crypto and ETF investing. Then, last month, SFC Chief Executive Officer Julia Leung said the regulator was moving toward allowing retail amidinvestors to buy spot crypto ETFs and would "welcome proposals using innovative technology that boosts efficiency and customer experience" provided any risks were addressed.

"The virtual asset landscape has evolved rapidly and begun to expand into mainstream finance," the two regulators said in Friday's statement. The SFC "is prepared to accept applications for the authorisation of other funds with exposure to virtual assets, including virtual asset spot exchange-traded funds (VA spot ETFs)."

The statement comes amount mounting speculation the U.S. Securities and Exchange Commission is likely to approve a spot bitcoin ETF in the first few weeks of next year.

Hong Kong HKMA SFC Hong Kong Monetary Authority Securities and Futures Commission Regulation ETFs Bitcoin ETF

Sheldon Reback

Sheldon Reback is CoinDesk's European news editor. Before joining the company, he spent 26 years as an editor at Bloomberg News, where he worked on beats as diverse as stock markets and the retail industry as well as covering the dot-com bubble of 2000-2002. He subsequently managed the Bloomberg Terminal's main news page before becoming the European editor for a global project to produce short, chart-based stories across the newsroom. His previous work as a journalist took him to Hong Kong, where he reported and edited for several technology magazines, and he also has experience in market research and writing computer manuals. Sheldon has an MBA from the London Business School and an industrial chemistry degree from Brunel University. He owns a small amount of ether.