Julia Leung, the Chief Executive Officer of Hong Kong’s Securities and Futures Commission (SFC), said the regulator was considering opening up spot crypto exchange-traded funds (ETFs) to retail investors, Bloomberg reported.

A spot crypto ETF is an investment vehicle that tracks the price of the underlying asset. The ETFs allow investors to have exposure to the asset without owning them directly.

According to Leung, the commission would allow these investments if they comply with the region’s regulations, noting that Hong Kong welcomes proposals that use innovative technology to boost efficiency and customer experience.

“We’re happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset,” she said.

This move signals a possible U-turn from the commission’s earlier restriction of spot-crypto ETFs to retail investors. For context, the regulator had described virtual asset exchange-traded funds (VA ETFs) and exchange-traded products (VA ETPs) as complex products that should only be offered to professional investors in its updated guidance for the industry last month.

However, the move corresponds with Hong Kong’s recent trend of implementing pro-crypto regulations. Throughout this year, Hong Kong has been actively shaping itself as a crypto-friendly region, with numerous initiatives designed to promote the emerging industry.

These efforts include the introduction of a licensing framework for crypto exchanges, financial support for web3 development, and regulatory mandates urging banks to provide equitable treatment to crypto clients.

It should be noted that Hong Kong has already approved the operations of three cryptocurrency ETFs: CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF, and Samsung Bitcoin Futures Active ETF.

Over the past several months, spot-based ETFs have enjoyed special attention from the crypto community, especially with the entrance of several major financial institutions, including BlackRock and others, who are filing applications with the U.S. Securities and Exchange Commission (SEC) for a spot-based Bitcoin ETF.

However, despite the market optimism surrounding the ETFs, the U.S. SEC has yet to approve any of the applications before it, instead choosing to delay its decision until next year.