Coinbase Expands into Asia: Hong Kong ETF Custody and HSBC Talks
1min read Coinbase, a leading cryptocurrency exchange, has recently expanded its services to include custody for a Hong Kong-based Exchange-Traded Fund (ETF). The company is also in talks with HSBC, a global financial services provider, to establish an ETF sub-custody plan. This move signals Coinbase's growing interest in the Asia-Pacific market, particularly in Hong Kong, where investors have shown a strong preference for digital assets.
Coinbase's Asia-Pacific Managing Director and Australia Director, John O'Loghlen, confirmed these developments. He noted that the company is conducting custody work for a local ETF in Hong Kong and is engaged in discussions with HSBC regarding an ETF sub-custodian plan. This strategic partnership could potentially open up new opportunities for coinbase in the region.
However, the Hong Kong regulatory framework presents certain challenges for international platforms like Coinbase. The local regulatory requirements include the need for local custody, local market makers, and onshore liquidity matching. These requirements could necessitate significant changes to the exchange's technical stack, specifically tailored to Hong Kong's liquidity and market-making capabilities. Coinbase is currently not planning to make these changes solely for Hong Kong and is awaiting further regulatory developments before proceeding.
Despite these challenges, the potential for success in the digital asset field in Hong Kong remains high. Investors from mainland China and Hong Kong have demonstrated a strong interest in digital assets as an asset class. Coinbase's expansion into the region could therefore be a strategic move to tap into this growing market.
