Hong Kong Makes History With Asia’s 1st EU-Regulated Crypto Index Launch

A new era will dawn at the Hong Kong Stock Exchange (HKEX) next month as the stock market introduces a pioneering index in Asia designed for crypto. Market analysts see this as a trailblazing initiative that will open new opportunities in the Asian financial hub as it integrates cryptocurrencies into the stock market.

HKEX Embraces Crypto

HKEX today announced a new index series set to start on November 15 specifically for cryptocurrencies, saying that it will cover Bitcoin and Ethereum.

In a statement, the Asian stock market boasts that the so-called HKEX Virtual Asset Index Series will be the pioneering European Union (EU)-compliant crypto index in the region.

This will once again position Hong Kong as a top-tier financial hub known for its innovative initiatives like making cryptocurrency investments part of the broader stock market.

HKEX Group Chief Executive Peter Chan said that HKEX is delighted to launch the new index series, emphasizing that the index can accommodate the regional demand for this “emerging asset class.”

Chan explained that the HKEX Virtual Asset Index Series will provide a transparent and reliable real-time benchmark, adding:

“We hope to help investors make informed investment decisions, thereby supporting the healthy development of the virtual asset ecosystem and consolidating Hong Kong’s position as an international financial center.”

How The New Index Will Work

According to HKEX, the virtual index series would allow Bitcoin and Ethereum to have real-time reference indices, saying, “The reference index is based on the 24-hour volume-weighted benchmark spot price of Bitcoin or Ethereum.”

Under the index, Bitcoin and Ethereum prices will be computed based on a 24-hour volume-weighted benchmark based on aggregate market value across major asset exchanges worldwide.

HKEX also confirmed that the index would reflect current US dollar prices, with real-time tracking and updates.

The stock exchange noted that the index will have a regular update every day at 4:00 p.m. Hong Kong time and will reflect current prices in USD.

The reference exchange rate in the new index adjusts the Asia trading benchmarks with other benchmarks across the globe.

Chan said that the HKEX Virtual Asset Index Series strengthened the position of Hong Kong as a key innovator in the financial sector by incorporating cryptos and providing traders with more sophisticated instruments to measure the market value.

The EU Benchmark Regulation

HKEX said that the virtual index series would be the first Hong Kong-developed asset index that follows the EU Benchmark Regulation (BMR).

The EU Benchmark Regulation is a reform implemented by the EU to ensure the integrity of indices being used as benchmarks by its member states.

The financial regulation is an offshoot of the 2008 financial crisis that put stringent requirements on benchmark administrators.

Featured image from Pexels, chart from TradingView