Jan 16

6 min read

[Delio] Samsung Asset Management to offer Bitcoin ETF in Hong Kong | Exclusive Korean crypto market insights

China would not be China without strict cryptocurrency-related regulations.

Yes, cryptocurrency services are prohibited by the local government, including trading platforms, promotions, sales, and even digital coin mining.

However, here we are telling you that although there have been a dozen restrictions on crypto-related activity, the government has never prohibited anybody from owning cryptocurrencies. We mean it! Owning Bitcoin or any other crypto coins of your choice is still legal and legally protected in China.

Just recently, China announced the launch of a digital asset trading platform” to streamline the exchange of non-fungible tokens and intellectual property (NFTs).

Step by step, Mainland China has the largest economy and one of the most active cryptocurrency markets. The country is following up on its central bank digital currency (CBDC) efforts to develop one of the most vital financial states in the world.

And interestingly, South Korea is taking a great part on this path.

Today, we are spotting details on how the recent announcement of the Bitcoin ETF launch by Samsung Asset Management in Hong Kong will help the industry’s further development.

Ni Hao, South Korea!

Samsung Asset Management announced the launch of the Bitcoin(BTC) exchange-traded fund (ETF) in Hong Kong on January 13.

According to a report by Fortune Korea, the Samsung Bitcoin Futures Active ETF (3135:HK) invests in bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME) to achieve performance that is comparable to spot BTC.

The latest crypto market rout hasn’t deterred Hong Kong from seeking to become a major hub for the industry. Its financial secretary, Paul Chan, recently reiterated that commitment, adding that Hong Kong will work to attract new businesses from all over the world. The city’s first BTC-linked ETF, the CSOP Bitcoin Futures ETF, went live last month.

Notably, an ETF investment offering marks a critical milestone in mainstream adoption. Institutional and ordinary investors can benefit from price exposure through a straightforward, regulated conduit since they are liberated from the complexity of the asset itself. As a result, Samsung’s Hong Kong product aims to increase exposure to and knowledge of bitcoin in the area.

But there are inherent disadvantages to that as well. While investors can use an ETF to get exposure to swings in the underlying asset’s fiat price, they won’t own the underlying asset, whether gold or Bitcoin. Moreover, there is a minute but crucial distinction, particularly for bitcoin. Now, investors can only take advantage of Bitcoin’s true value proposition of censorship-resistant and sovereign digital money if they decide to buy and self-custody BTC themselves.

Made in China: digital Yuan is taking over the world

History recognizes China as one of the first nations to create its national digital currency. The People’s Bank of China, or PBoC, has started reporting the quantity of yuan in circulation using the e-CNY, the nation’s central bank’s digital currency. This is a massive milestone for the nation and the early adoption steps of the central bank’s digital currency.

According to the financial report, China had 13.6 billion digital yuan ($2 billion) in circulation at the end of December. The banking institution’s cash and bank reserves climbed by 15.3% in 11 months to 10.5 trillion yuan in December. Notably, just 0/13% of the total comprises digital yuan. According to the China central bank, the month-end M1 or M2 growth rates of 2022 were unaffected by the digital yuan in circulation.

The People’s Bank of China (PBoC) pushed the use of the digital yuan in China, which increased the amount of money in circulation. The bank thinks that the CBDC may be utilized to strengthen local economies. Many towns also use digital money to carry out the aim. Shenzhen was one of the first Chinese cities to allow people to pay municipal taxes and fees using the e-CNY. Additionally, the city awarded 30 million digital yen to encourage consumer spending.

The Bank of International Settlement said in October that China’s digital yuan was the most popular digital currency. As the most actively traded token in the cross-border CBDC experiment, e-CNY prevailed. To test out cross-border payments in CBDCs, a six-week test was done. The effort includes the central banks of Thailand, Hong Kong, and the United Arab Emirates, in addition to the PBOC.

China’s financial statistics report:

http://www.pbc.gov.cn/en/3688247/3688978/3709137/4765043/index.html

What’s so special?

The main benefit of adopting the digital yuan as opposed to crypto currencies is safety and security. Additionally, it’s accessible to the owner whenever they need them. You will gain the most from using the Digital Yuan as you become more integrated into the ecosystem of government finance.

In 2022, the digital Yuan reached roughly 2.2% of global payments and has been steadily increasing since then.

The government will always have a high degree of control over the value and movement of the digital Yuan both inside and outside Chinese borders. The Digital Yuan will also be a key component in governing and managing China’s economy. It is said to be the finest initiative China could launch since it will also offer the Chinese economy full backing.

China warms to NFTs

Along with the cryptocurrency industry, NFT is another digital asset industry that shows skyrocketing speed. As the NFT boom continues to grow, the Chinese government takes the industry as a new potential for business development, bringing billions of dollars to the country’s economy.

Thus, the NFT market is anticipated to increase by 69.5% annually to reach US$4,882.5 billion by 2028.

To reach this goal and adapt to the global trend, the government of China launched its first state-backed non-fungible token (NFT) marketplace on January 1.

According to the local media outlets, the platform is operated by three state-owned and commercial organizations: Huban Digital, a private corporation; China Technology Exchange, a government-backed organization; and Art Exhibitions China. The “China Digital Asset Trading Platform” marketplace will be utilized to trade collectibles, digital copyrights, and property rights operating under the “China Cultural Protection Chain” blockchain.

Nevertheless, the NFT marketplace will allow for the secondary trade of digital assets. However, few other details are known about it. The China Cultural Security Chain is likely to be centralized, which means that, unlike Ethereum or several blockchains, all NFTs enabled by the chain will belong to the entity in control rather than individual users.

Food for thoughts

China has developed a digital Yuan NFT marketplace during the past several years. However, there are still numerous fundamental obstacles limiting its broad usage. How well the Chinese government will overcome these obstacles is still an open issue. Mainland China might be able to promote the use of the digital yuan within its boundaries. However, it is doubtful that it will expand outside those borders without a significant change in the Chinese political system or how the world views China.

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