Hong Kong to Introduce Unified Bitcoin, Ethereum Benchmark Prices With New HKEX Index Series

• HKEX’s Virtual Asset Index Series to launch on Nov 15, offering real-time benchmarks for Bitcoin and Ethereum in the Asian time zone.
• Hong Kong plans to extend tax breaks to crypto investments, including privately offered funds and family offices, by year-end.
• Hong Kong’s financial authorities to introduce stablecoin rules and expand crypto trading licenses as part of broader crypto regulations.

Hong Kong Exchanges and Clearing Limited (HKEX) announced today that it will introduce its Virtual Asset Index Series on November 15, 2024, aiming to provide a unified reference price for Bitcoin and Ethereum in the Asian time zone. The launch is a forward step in the development of digital assets in Hong Kong, reinforcing the city’s ambitions as Asia’s leading digital asset hub. 

This initiative aligns with global standards, complying with the European Union’s Benchmark Regulation (BMR), and represents a first in Hong Kong’s financial landscape. It is co-managed and calculated by UK-based data provider CCData, ensuring accuracy and transparency.

Benchmarking Virtual Assets in Real-Time

The Virtual Asset Index Series will offer transparent and reliable benchmark prices for Bitcoin and Ethereum, addressing regional demand for consistent virtual asset pricing. It will utilize a 24-hour volume-weighted spot price calculated from aggregate prices across multiple major exchanges, denominated in U.S. dollars. 

Real-time benchmarks will provide investors with reliable reference prices, reducing discrepancies across global exchanges. Additionally, the index series will include reference exchange rates, specifically designed for financial product settlements, calculated daily at 4:00 PM Hong Kong time.

Expanding Tax Incentives for Digital Assets

During the launch event, Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, announced plans to extend existing tax concessions to cover crypto investments by year-end. This expansion will include privately offered funds and family offices investing in virtual assets. 

By broadening the scope of eligible assets under Hong Kong’s fund regime, the city aims to attract more investments and establish itself as a leading digital finance hub. Hui noted that these measures would create additional momentum for market growth.

Broader Regulatory Developments in Hong Kong’s Crypto Sector

Financial Secretary Paul Chan highlighted ongoing efforts by the Securities and Futures Commission to evaluate more applications for crypto trading platform licenses. Since June 2023, Hong Kong has issued licenses to three exchanges: OSL, HashKey, and HKVAX. 

The Hong Kong Monetary Authority (HKMA) is also advancing regulatory frameworks, planning to introduce stablecoin legislation by year-end, following its stablecoin sandbox launch in March. Meanwhile, over-the-counter trading regulations are under review, with a second round of consultations scheduled for next year, aiming to establish a licensing regime for crypto custodian services.