Hong Kong conditionally approved its first spot Bitcoin and Ether exchange traded funds (ETFs) on Monday, money managers said, paving the way for the city to become Asia’s first to accept the cryptocurrencies as a mainstream investment tool.

At least three offshore Chinese asset managers will launch the virtual asset spot ETFs soon.

The Hong Kong units of Harvest Fund Management and Bosera Asset Management said in separate statements they had received conditional approvals from the Hong Kong Securities and Futures Commission (SFC) to launch the ETFs.

Meanwhile, the Hong Kong unit of China Asset Management — ChinaAMC (HK) said it had received a regulatory approval on Monday to provide virtual asset management services, and the firm was developing spot ETFs of Bitcoin and Ether.

Replying to Reuters’ questions, the SFC said it issues a conditional authorisation letter to an ETF application if it generally satisfies its requirements, subject to various conditions, including fee payments, filing of documents and the Hong Kong Stock Exchange’s listing approval.

The regulator didn’t comment on the details of virtual asset spot ETFs. The step comes just three months after the US launched its first ETFs to track spot bitcoin. Those ETFs have already drawn roughly $12 billion in net inflows.

While cryptocurrency is banned in mainland China, Hong Kong has been promoting the city as a global digital asset hub.

Reuters