China’s Fuzhou City Offers Incentives to Entice Blockchain Start-Ups

UBS extends crypto ETF access to clients in Hong KongMultinational investment bank UBS Group AG has followed suit with competitors like HSBC, enabling its wealthy clients in Hong Kong to engage in the trading of select crypto-linked exchange-traded funds (ETFs).Photo by Pierre Borthiry — Peiobty on UnsplashRegulatory approval to offer three ETFsThis move, reported by Bloomberg on Thursday, aligns with Hong Kong’s efforts to establish itself as a prominent digital asset hub. Citing an undisclosed source, Bloomberg outlined that three crypto ETFs, namely the Samsung Bitcoin Futures Active, CSOP Bitcoin Futures and CSOP Ether Futures, have received approval from the Securities and Futures Commission (SFC) and will be available on UBS’s Hong Kong platform starting this Friday.The inclusion of these ETFs allows UBS clients to diversify their investment portfolios, offering exposure to the dynamic crypto market. Educational materials will also be accessible to clients, aiding in their understanding of associated risks. While UBS declined to comment on this development, it marks a strategic move by the Swiss bank to tap into the growing demand for crypto-related investment products.In June, Hong Kong’s largest bank, HSBC, moved to expand its offering to include crypto ETFs. It has made available the very same crypto ETFs as UBS is about to offer.Hong Kong’s crypto credentialsHong Kong introduced a comprehensive digital asset regulatory regime on June 1, aiming to safeguard investors while fostering the Chinese autonomous territory’s emergence as a digital financial center. The SFC permits retail investors to trade major tokens on licensed exchanges under these regulations.Despite these regulatory advancements, Hong Kong faced setbacks, notably with the recent issues surrounding the unlicensed JPEX exchange, which led to increased scrutiny. The establishment of a joint task force between the SFC and the police aims to monitor and prevent suspicious activities within the crypto industry.Globally, financial institutions remain cautious about compliance risks in the crypto sector. However, signs of increased engagement are emerging. DBS, Singapore’s largest bank, has expressed its intention to seek a license to offer crypto services to Hong Kong customers. ZA Bank, the largest virtual bank in Hong Kong, plans to provide token-to-fiat currency conversions over licensed platforms. Furthermore, SEBA Bank, backed by the Julius Baer Group, has obtained a license for its unit to offer crypto services in Hong Kong.Unlocking ETF potentialA report published by the Hong Kong Stock Exchange in April claimed that crypto ETFs possess the potential to unlock the next phase of digital asset expansion in Asia. Earlier this week, it emerged that regulators were open to the notion of allowing retail access to spot crypto ETFs in Hong Kong, provided that the necessary regulatory approvals and checks were in place.The inclusion of the CSOP Bitcoin Futures and CSOP Ether Futures funds on UBS’s platform highlights the gradual recovery of the crypto sector from the market rout experienced in 2022. Despite the previous market challenges and collapses, the prospect of the U.S. allowing its first spot Bitcoin ETFs has contributed to a resurgence in the largest token’s price this year. The move by UBS aligns with the broader trend of financial institutions cautiously embracing the crypto economy, indicating a shifting attitude toward these digital assets in the financial mainstream.

HashKey Group, a Hong Kong-headquartered digital asset financial services firm, has partnered with Bosera Asset Management (International) Co., the Hong Kong subsidiary of Chinese asset management firm Bosera Asset Management, to launch the world’s first tokenized money market exchange-traded funds (ETFs). In a press release published by PR Newswire on behalf of HashKey Group on March 28, HashKey outlined that the two funds are titled “Bosera HKD Money Market ETF (Tokenised Class)” and ”Bosera USD Money Market ETF (Tokenised Class).”While the products were launched last Friday, they won’t officially go live until April. Both products have been approved by Hong Kong’s Securities and Futures Commission (SFC). Photo by Vighnesh Dudani on UnsplashArising out of Project EnsembleThis latest product offering has its origins in Project Ensemble, an initiative launched by the Hong Kong Monetary Authority (HKMA) back in March 2024. The original aim of Project Ensemble was to support the development of the tokenization market in Hong Kong. The SFC got involved later that year, collaborating with the HKMA in the launch of a regulatory sandbox aimed at advancing the tokenization of assets in various financial sectors. In October 2024 it emerged that HashKey was participating within that sandbox, with these new products arising from those efforts. The company claims that these tokenized products improve upon what’s currently on offer via traditional finance, providing greater transparency and operational efficiency, thanks to the use of blockchain technology.  HashKey Tokenisation, the tokenization arm of the firm, takes care of full-process design and execution for tokenized issuance. Subsequently, these products will be deployed on HashKey Chain, a regulatory-compliant, institutional-grade layer-2 network geared towards bridging the gap between traditional finance and Web3. On that subject, HashKey Group Chairman and CEO Dr. Xiao Feng stated:"Bringing money market ETFs on-chain through blockchain technology is a crucial step for traditional finance to embrace Web3.” Looking towards the future, Feng added that the company expects “more traditional financial institutions to actively enter the crypto finance sector through innovative tokenisation products.”Anna Liu, CEO of HashKey Tokenisation, told the South China Morning Post (SCMP) that “the biggest advantages of this product are that the underlying assets are mature and high-quality, and it fully considers security and regulatory compliance while reducing investor costs and improving overall liquidity.” Liu added that the firm hopes that this product offering is the first of many, paving the way for subsequent tokenized real-world asset (RWA) offerings. Last month, Hong Kong-based digital asset platform OSL launched a tokenized mutual fund, the ChinaAMC HKD Digital Money Market Fund. The retail tokenized fund has been issued by China Asset Management (Hong Kong), with Standard Chartered Bank (Hong Kong) acting as tokenization agent, digital platform operator and administrator. In the U.S., financial services company Fidelity Investments recently filed documents with the intention of rolling out a tokenized U.S. money market fund. BlackRock, the world’s largest asset manager, launched its tokenized money market fund, BUIDL, last year. The fund is expected to surpass a market cap of $2 billion in the coming weeks.

At the 16th Mint Annual BFSI Summit and Awards in Mumbai, Reserve Bank of India (RBI) governor Shaktikanta Das reiterated the central bank's cautious stance on cryptocurrencies, regardless of recent global developments. During the event, which was held on Thursday, Das took to the stage. He was asked if the approval of spot bitcoin exchange-traded funds (ETFs) in the United States gives legitimacy to cryptocurrency.Photo by rupixen.com on UnsplashUnwavering responseDas was unwavering in his response, maintaining that the RBI remains steadfast in its approach and opposition to cryptocurrencies. He stated: "The way we look at crypto remains unchanged, irrespective of who does what."  He emphasized that the RBI does not intend to emulate regulatory decisions made by other countries. Despite this global development, Das maintained the RBI's reservations, expressing concerns about the potential risks associated with venturing further into the cryptocurrency space. Favoring a crypto banLast month, officials from the Indian central bank told the Hindustan Times that the RBI believes that the Indian government should impose an outright ban on cryptocurrencies in India. One unnamed official stated:"The government cannot sidestep the RBI’s concerns while deciding on cryptocurrencies, as it is responsible for monetary stability in India and maintains price stability." Das acknowledged the potential of blockchain technology, the foundation of cryptocurrencies, highlighting its versatility for various applications. Both the central bank and the Indian government have encouraged the development of blockchain rather than crypto. Last year, an RBI-led initiative, the National Payments Corporation of India (NPCI), recruited blockchain expertise to further develop that project. However, he made it clear that the RBI's focus remains on strengthening governance and assurance in regulated entities, with an emphasis on early identification, close monitoring and effective management of risks. Citing ‘Tulipmania’Das cautioned against a “crypto mania,” drawing parallels to the historical tulipmania of the 17th century. He underscored the RBI's position that embracing cryptocurrencies could pose significant risks, echoing his previous warnings about the macroeconomic and financial stability risks associated with these digital assets. The governor emphasized the importance of instilling an appropriate risk culture within organizations, with active involvement from the board and senior management. Das stated that the RBI expects top officials and board members to play a more proactive role in risk management. India’s crypto community responded critically to the RBI governor’s comments. Ajeet Khurana, a Web3 growth investor, responded on social media, stating:”Dear RBI governor, I respect you a lot, and I don’t mind that you don’t like Crypto. Diverse points of view are healthy. Yet, using words like 'tulip mania' only gives the impression that you are out of touch with what is happening in Web3. My request, Sir, is that you update yourself.” Vivek Sen, the founder of Bitgrow Lab, wrote:”Dear RBI, First, don't club Bitcoin with ‘Crypto’. Secondly, Tulips did not experience an 80% drop on four occasions, and they recovered each time.”Despite opposition to cryptocurrencies in official circles in India, a report last year produced by Chainalysis found that India is leading the way in Asia in terms of grassroots adoption of cryptocurrencies.