By Summer Zhen and Jason Xue

HONG KONG (Reuters) – Spot Bitcoin exchange-traded funds (ETFs) are poised for launch in Hong Kong this month, with the first approvals expected to be announced next week, according to two individuals familiar with the matter.

This timeline would position Hong Kong as Asia’s pioneer in offering these popular ETFs, significantly quicker than the industry’s anticipation of launches sometime this year.

One of the sources indicated that regulators have expedited the approval process.

Amid a loss of its luster as a global financial hub due to pandemic-related restrictions, China’s economic challenges, and Sino-U.S. tensions, Hong Kong authorities have been eager to enhance the city’s appeal for financial trading.

“The significance of Hong Kong ETFs is far-reaching as it could bring in fresh global investment as well as pushing crypto adoption to a new height,” said Adrian Wang, CEO of Metalpha, a Hong Kong-based crypto wealth manager.

In January, the U.S. introduced the first U.S.-listed exchange-traded funds (ETFs) to track spot Bitcoin, attracting approximately $12 billion in net inflows, according to data from BitMEX Research.

Bitcoin has surged by more than 60% this year, reaching an all-time high of $73,803 in March. On Wednesday, it was trading around $69,000.

At least four mainland Chinese and Hong Kong asset managers have submitted applications to launch these ETFs, as per the two sources.

China Asset Management, Harvest Fund Management, and Bosera Asset Management, through their Hong Kong units, are among the applicants, the two individuals and a third source mentioned.

The sources, not authorized to speak to the media, declined to be identified.

Hong Kong’s Securities and Futures Commission (SFC) and the three Chinese companies mentioned declined to provide comments.

This month, China Asset Management and Harvest Fund Management’s Hong Kong units received approval to manage portfolios investing more than 10% in virtual assets, according to the SFC’s website.

Their parent companies are prominent mutual fund firms in China, each managing over 1 trillion yuan ($138 billion) in assets.

Despite cryptocurrency trading being prohibited in mainland China, offshore Chinese financial institutions have displayed interest in engaging with crypto asset development in Hong Kong.

Hong Kong endorsed its initial ETFs for cryptocurrency futures in late 2022. The largest among these, the CSOP Bitcoin Futures ETF, has witnessed its assets under management expand sevenfold since September to approximately $120 million.

Value Partners, based in Hong Kong, has also mentioned exploring the launch of a spot Bitcoin ETF. However, it has not disclosed if it has submitted an application.

($1 = 7.2305 yuan)