Animoca co-founder Yat Siu said Bitcoin ETF approval could have a bigger impact in Asia.

long-awaited Spot Bitcoin ​​ETF Approved Yat Siu, co-founder of Animoca Brands, a Hong Kong-based cryptocurrency venture capital firm, told The Block in an interview Wednesday that cryptocurrency development in the U.S. will have a bigger impact on cryptocurrency development in Asia this morning. He said it would be.

Landmark approval from the U.S. Securities and Exchange Commission (SEC) – Gary Gensler, his chairman. I have a somewhat unfavorable opinion Industry leaders said new capital for cryptocurrencies is expected to flow into the industry as spot Bitcoin ETFs will serve as a safer and more secure vehicle for those interested in cryptocurrencies.

While the SEC’s decision may force companies around the world to find ways to participate in this opportunity, Siu said the way cryptocurrency regulation is progressing in Asia means that US ETF approval will have a more positive impact on the region than other regions. said.

“There is regulatory clarity and basically the willingness of governments and regulators to build and engage with these ecosystems and see the opportunities that are there,” Siu added.

Even though the SEC announced its approval of the ETF, its chairman Gary Gensler stood his ground. He said the decision “in no way signals the Commission’s intention to approve listing standards for crypto asset securities.”

Siu noted that Asian investors, especially the younger generation, tend to have a more open view of capitalism on average than their American counterparts. “People are more energetic and healthier in Asia than in the United States,” he said.

“In Asia, of course there are inequalities, but capitalism has largely benefited this generation and the last,” Siu said. “I mean, look at China, look at Korea, look at Southeast Asia, generally speaking, all of these countries are literally like nothing existed 30 years ago, in many cases like nothing existed,” said the Animoca co-founder. explained.

Brian Baek Hoon-jong, co-founder and chief operating officer of cryptocurrency management platform SmashFi, reinforced his view on the major impact the US spot Bitcoin ETF approval will have on Asia. “Asian investors have always been more adventurous than their Western counterparts, right from the early days of Bitcoin. An ETF would be like the perfect marriage between cryptocurrency and regulation, and would ease the concerns of institutional investors looking for a legal way to build a cryptocurrency portfolio.”

Chong Kok Kee, CEO of AsiaNext, an institutional-only cryptocurrency exchange, explained: Crypto Adoption in Asia It is higher than other continents, with Central Asia and South Asia being the highest regions. “Asian markets, known for their preference for stable investments, may see a shift in mindset towards cryptocurrencies as investment assets in addition to trading purposes, as ETFs provide a regulated, low-risk avenue for investment exposure to cryptocurrencies. ” Chong said. .

Who’s next?

After Coinbase Receives U.S. ETF Approval “Watershed Moment” In the case of cryptocurrencies, their spot cryptocurrency products can be launched in Asian jurisdictions.

Hong Kongwhich underwent a major regulatory update last year to regain its status as the region’s cryptocurrency hub, could next introduce a spot cryptocurrency ETF in Asia, several regional experts have suggested.

“In Asia, Hong Kong is clearly a prime candidate for the next spot cryptocurrency ETF. In line with its cryptocurrency hub ambitions, Hong Kong regulators have already sent a clear message that they are willing to consider spot cryptocurrency ETFs, including retail ones,” said Angela Ang, former regulator of the Monetary Authority of Singapore and senior policy advisor at the blockchain intelligence firm. TRM Labs told The Block.

“The next step is to align regulatory and industry expectations on controls and compliance to make this a reality,” Ang added.

Hong Kong, China’s financial hub and regulatory testing ground, appears to be already on the move. Livio Weng, COO of Hong Kong-based cryptocurrency exchange HashKey, said on Wednesday that 10 fund managers, including one backed by Chinese capital, will be investing in the fund. Considering launching a spot cryptocurrency ETF city.

In December, the Hong Kong Securities and Futures Commission and the Hong Kong Monetary Authority, Hong Kong’s de facto central bank, presentation Both organizations reviewed their existing policies. Regulators announced two things. circular Addressing your needs for a spot crypto ETF.

Hong Kong lawmaker Johnny Ng said at X Today: “Take the lead” in the cryptocurrency space By introducing a spot crypto ETF. He added, “Amid the rapid development and fierce competition in the virtual asset field, we hope that Hong Kong can quickly secure its position globally by leading the implementation of relevant policies and products, especially in Asia.”

Singapore, another major financial hub, could also be a potential contender in the Asian spot cryptocurrency ETF race. “Singapore’s mature regulatory environment positions it as a mature and leading jurisdiction overseeing structured spot cryptocurrency products,” said Wayne Huang, co-founder and group CEO of Taiwan-based cryptocurrency exchange XREX.

Goh Ko-deok, CEO of SBINFT, a non-fungible token subsidiary of Japanese financial services giant SBI Group, expects significant regulatory movement in Japan in the near future. “The approval of spot ETFs in the US is likely to have a very positive impact on Japanese policymakers. “It would not be surprising to see discussions on ‘Japanese ETFs’ accelerating.”

Variables remain

Nevertheless, there are still variables for Asia to launch a spot cryptocurrency ETF. One could be hiring capital inflows from Asia compared to the massive inflows of capital from the United States. “The United States is on solid ground in this regard. “Asia is not inferior, but the success factor is how effectively it can integrate the financial sector and funds,” he said.

Another factor is how progressive it is. local regulatory agency That will likely be the case as the cryptocurrency industry is still battling unpredictable volatility and trust issues resulting from hacks and bankruptcies.

“Hong Kong and Singapore have become more cautious in encouraging retail participation in virtual asset investments,” said Patricia Ho, General Counsel. “This is especially true after residents of both cities suffered losses due to the collapse of JPEX and FTX in Hong Kong,” he said. Scroll is an Ethereum layer 2 network.

“In the short term, more regulations may be implemented in Hong Kong, which could dampen investor appetite. In the mid- to long-term, we expect interest in and investor preference for domestic virtual assets to increase through Bitcoin halving, SFC’s approval of a virtual asset trading platform, and Hong Kong’s new stablecoin regulations later this year.” It was added.

potential approaches

Asset managers in Hong Kong could consider launching products through a fund structure to provide investors with exposure to Bitcoin, as suggested by Glenn Woo, head of APAC sales at web3 infrastructure company Blockdaemon.

“Hong Kong ETF issuers essentially have the option to create a ‘fund of funds’ containing ETFs outside Hong Kong,” said Woo, who has more than 10 years of experience in Hong Kong’s traditional financial industry. “You could see thematic ETFs, like technology (or) blockchain ETFs, actually being able to have these Bitcoin ETFs in their baskets through a fund-of-funds structure.”

Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.

© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.