Hong Kong Exchanges and Clearing Limited (HKEX) plans to launch the HKEX Virtual Asset Index Series on November 15.
This is Hong Kong’s first shot at providing an EU-compliant benchmark for cryptos, starting with Bitcoin and Ethereum. Designed to meet regional demand, HKEX says the Index Series will bring transparency and consistency to pricing virtual assets in Asia.
Key details of the Index Series
The Index Series will cover real-time reference prices for Bitcoin and Ethereum, calculated based on a 24-hour volume-weighted benchmark spot price aggregated from major global exchanges.
HKEX has promised a daily update at 4:00 p.m. Hong Kong time. Peter Chan, HKEX Group’s Chief Executive, described the launch as a way to “help investors make informed investment decisions” by creating a “reliable real-time benchmark”.
He also pointed to Hong Kong’s push to solidify its reputation as a finance hub by tapping further into cryptos and giving investors more sophisticated tools to gauge market value.
In addition to Bitcoin and Ethereum price indices, the series will include a reference exchange rate designed for financial settlements, aligning the trading benchmarks in Asia with the rest of the world.
HKEX also confirmed that the index would reflect current U.S. dollar prices, with real-time tracking and updates.
Hong Kong’s crypto situation
Hong Kong’s relationship with crypto goes back to around 2013, coinciding with the first wave of Bitcoin’s popularity.
By 2018, Hong Kong’s Securities and Futures Commission (SFC) introduced its first regulatory framework for virtual assets, to improve transparency and protect consumers.
This laid the groundwork for what would become a comprehensive regulatory structure over the next few years. In 2020, the SFC mandated that all crypto exchanges operating in the region had to register with the commission, establishing the groundwork for the compliant environment we see today.
As part of its approach, the SFC implemented strict anti-money laundering (AML) and know-your-customer (KYC) policies to make sure the exchanges met international standards on consumer protection.
Hong Kong has kept a proactive stance in crypto regulation. By 2021, the SFC had crafted a licensing regime requiring exchanges to operate under strict guidelines, including AML and KYC rules.
This year, Hong Kong plans to approve more licenses for crypto exchanges, following a rigorous five-month inspection of their compliance readiness.
The demand for crypto there has surged too. For instance, Hong Kong’s largest Bitcoin futures ETF saw its assets under management grow five-fold within five months, topping $100 million by last week.
To attract even more crypto businesses, Hong Kong has proposed tax incentives on virtual asset ownership, hoping to lure companies and investors.
The government is also integrating artificial intelligence (AI) into its financial services, wanting to modernize the financial sector.
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