Striving to become the Asian digital currency hub! Hong Kong launches a series of virtual asset indices and plans to issue virtual asset trading platform licenses by the end of the year

HKEX makes another move to become the Asian digital asset hub.

On Monday, October 28th, HKEX announced that it will launch the Hong Kong Exchange Virtual Asset Index Series (Index Series) on November 15, 2024, to provide a reliable benchmark price for the rapidly emerging asset class of virtual assets and support Hong Kong's development as a leading digital asset center in Asia.

This Index Series will provide transparent and reliable benchmarks for the pricing of Bitcoin and Ether in the Asian time zone, aiming to offer a unified reference price for virtual assets and address price discrepancies across global exchanges.

The launch of this Index Series is part of HKEX's efforts in the virtual asset field. Ye Zhiheng, Executive Director of the Intermediaries Division of the SFC, previously stated that virtual asset trading platform licenses will be issued by the end of the year, a virtual asset trading platform consultation group will be launched early next year, and support for tokenization and Ensemble projects will continue.

The first virtual asset index series compliant with BMR

Specifically, the Index Series will include reference indices for Bitcoin and Ether as well as reference exchange rates. The reference indices are based on the volume-weighted average spot price of Bitcoin or Ether over 24 hours, calculated based on aggregated market prices from multiple major virtual asset exchanges, and priced in real-time in USD. The reference exchange rates are designed for financial product settlements and are calculated daily at 4:00 pm Hong Kong time.

This Index Series will be the first virtual asset index series developed in Hong Kong that complies with the EU Benchmark Regulation (BMR), jointly managed and calculated by a benchmark administrator registered in the UK and virtual asset data and index provider CCData.

Hong Kong has been striving to become the Asian hub for cryptocurrency trading. In 2022, Hong Kong issued a policy statement on the development of virtual assets, aiming to nurture a vibrant virtual asset industry and ecosystem in Hong Kong.

Last year, Hong Kong approved license upgrades for two major cryptocurrency exchanges, HashKey Group and OSL, to provide trading services to individual investors. At the end of April in the first half of the year, the SFC approved the first issuance of 6 digital currency spot ETFs under Huaxia (Hong Kong), Bosera International, and Jia Shi International, which were officially listed on the HKEX on April 30.

Comprehensive support policies for virtual assets

During his speech at the 2024 Hong Kong Fintech Week, Ye Zhiheng, Executive Director of the Intermediaries Division of the SFC, introduced measures to further develop and expand the Hong Kong virtual asset market:

Rapid licensing process: The SFC's current regulatory measures include risk-based on-site inspections and direct dialogues with senior management and controllers of applicants. Building on this, the SFC is implementing a rapid licensing approval process to handle applicants for virtual asset trading platforms identified as licensees, with the first batch of formal licenses expected to be issued to identified virtual asset trading platform applicants by the end of this year.

Virtual Asset Trading Platform Consultation Group: To support the sustainable business model development of licensed virtual asset trading platforms, the China Securities Regulatory Commission (CSRC) is establishing a formal consultation group for all licensed virtual asset trading platforms. This group will be composed of representatives from each licensed institution to ensure that the CSRC considers their viewpoints in the policy-making process.

Tokenization and Ensemble Project: The CSRC will continue to support industry initiatives related to tokenization. The CSRC is a core member of the Architecture Working Group of the Hong Kong Monetary Authority's Ensemble Project, jointly leading tokenization solutions for the asset management industry. The Ensemble Project plays a crucial role in establishing the infrastructure needed for the Hong Kong tokenization ecosystem, ultimately setting industry standards for tokenized asset settlement