On September 27, Tim Lui, Chairman of the Hong Kong Securities and Futures Commission (SFC), addressed an event highlighting the positive performance of Hong Kong’s first virtual asset spot exchange-traded funds (ETFs) since their launch in April. The market value of these ETFs has surpassed $300 million, demonstrating their steady operation and growing acceptance among investors.

Lui also introduced Asia’s first virtual asset futures ETF, which he believes will empower retail investors to better manage associated risks. This innovation is expected to further drive the development of Hong Kong’s financial market.

As a key financial hub, Lui emphasized the importance of enhancing Hong Kong’s resilience through innovative technologies and sustainable finance. He pointed out the potential benefits of blockchain technology, particularly in reducing transaction costs, with asset and securities tokenization identified as a key application. The SFC is collaborating closely with the Hong Kong Monetary Authority to explore additional use cases for tokenization, aiming to foster a comprehensive ecosystem around these developments.

However, Lui did express caution regarding the inherent volatility risks of virtual assets, advising that they should not be viewed as standard investment recommendations. Recognizing the varied risk appetites of both professional and retail investors, the SFC has opted to establish a regulatory framework to oversee the activities of trading platforms in this sector. This proactive approach aims to create a safer environment for all participants in the virtual asset market while fostering growth and innovation.