China: Financial Watchdog Receives Application Seeking Blockchain Exchange-Traded Fund
According to a recent disclosure by the Chinese financial watchdog – the China Securities Regulatory Commission (CDRC) – Shenzhen-based asset management firm Penghua Fund has submitted an application seeking to list an exchange-traded fund (ETF) that will track blockchain-related stocks as underlying assets. Coindesk reports, December 30, 2019.
A Blockchain ETF In China
China may soon witness its first-ever blockchain ETF. The country’s financial regulator recently received an application that aims to launch an ETF that will supposedly track and reflect the performance of Shenzhen-listed public stocks with businesses in the distributed ledger technology (DLT) industry.
Should the proposed ETF receive a green-light from the CDRC, it will be the country’s first completely DLT-based ETF that is open to public investors.
Interestingly, the CDRC received the application from Penghua Fund at about the same time as the Shenzhen Stock Exchange launched a Blockchain 50 Index that tracks the movements of 50 stocks listed on the exchange that are in the DLT space.
In an announcement dated December 24, 2019, the CDRC stated that the Blockchain 50 Index “tracks those that are involved in different aspects of the blockchain ecosystem and selects the top 50 by market capitalization.”
Notably, the Blockchain 50 Index list currently includes the likes of Ping An Bank, along with several internet companies that ventured into the cryptocurrency space seeing its steep rise and propulsion in recent years. One such firm is Wholeasy, which entered the digital currency mining space in 2018 as it made a gargantuan investment of $80 million in Bitcoin (BTC) miners.
Learning from Where the U.S. Missed the Hint?
It’s no secret that China has typically shown a pro-blockchain and anti-crypto stance since as far as one’s memory can serve.
However, with the possibility of an incoming blockchain ETF, one can imagine that China might have taken a leaf out of the U.S.’s book when it comes to developing a competitive regulatory environment that is conducive to emerging trends and technologies.
In particular, the U.S. Securities and Exchange Commission (SEC) is infamous within the cryptoverse for its consistent red-flagging of ETF’s related to blockchain or crypto. Only time will tell if the CRDC’s approval of a blockchain ETF could develop into a learning moment for the U.S. financial watchdog.