UBS is allowing wealthy Hong Kong clients to invest in cryptocurrency ETFs, according to a Bloomberg report that cited insider sources. This is in line with Hong Kong’s steps to embrace web3. The three ETFs are authorized by the Securities and Futures Commission and linked to futures for Bitcoin and Ether.
In June, Hong Kong started to allow retail access to digital assets via just two regulated exchanges. Last month, it updated rules for ETFs explicitly blocking retail investment in foreign spot ETFs. It reiterated similar concerns expressed by the United States SEC that futures markets such as the CME and CBOE are regulated. However, in the United States a federal court strongly disagreed with the assertion, given that spot prices drive futures prices.
Meanwhile, UBS has been actively experimenting with blockchain on the asset and wealth management side. Recently UBS Asset Management piloted a money market fund on the public Ethereum blockchain using its UBS Tokenize platform as part of Singapore’s Project Guardian.
In June it used the same platform and blockchain to issue digital structured notes for Bank of China Investment (BOCI). Late last year UBS Wealth Management issued blockchain-based debt securities to high net worth individuals in Singapore and Hong Kong.
Outside of Asia, last year UBS itself issued the largest digital bond to date, a CHF 375 million bond registered with the SIX Digital Exchange (SDX). Because of the SDX integration with the main SIX stock exchange, these bonds trade on SIX and SDX and institutional investors that are not blockchain savvy can buy them.