ASIC gives early approval for launching Bitcoin (BTC) ETFs

Fri 29 Oct 2021 ▪ 19h21 ▪ 3 min read — by Katie Donaldson

The Australian Securities and Investments Commission (ASIC) has issued a statement according to which the agency will approve launching ETFs with underlying crypto assets. Only Bitcoin and Ethereum (ETH) have got the green light so far.

Changing Australia’s crypto market

Bitcoin and Ethereum-backed investment funds are likely to start trading on the Australian Securities Exchange (ASX) in the coming months. The commission has also published a set of guidelines for the crypto market. All companies interested in establishing ETFs have to adhere to a set of best practice guidelines, with custody of the digital assets highlighted as a key element.

“Bitcoin and Ether appear likely to satisfy all five factors identified above to determine appropriate underlying assets for an ETP. We expect the range of non-financial product crypto-assets that can satisfy these factors will expand over time. However, we are also aware of the real risk of harm to consumers and markets if these products are not developed and operated properly,” the agency’s spokesperson commented on the news.

Fund managers that plan to issue crypto-backed products will be required to front a minimum of $10 million in net tangible assets. The companies should be able to compensate investors for any custodial assets lost, as well as disclose any risks of crypto investing beforehand, including risk of cybercrime, market losses and even the environmental impact associated with mining and maintaining some of the altcoins.

“We have been working with a range of issuers interested in launching ETPs that invest in crypto-assets and are very aware of the high level of interest amongst investors for products that provide access to these assets,” the spokesperson added. 

ASIC’s move will allow for limited inclusion of crypto assets to firms with transparent pricing mechanisms, including many institutional investors, as well as result in a relevant futures market for trading linked derivatives.

Crypto ETFs could be ready in Australia by the middle of 2022; several major Australian firms were already preparing for such launching even before the statement. The Australian Securities and Investments Commission released a response to industry consultation on the use of crypto assets as underlying assets for exchange traded products on Friday, 29th October. The regulator has greenlighted launching BTC ETFs.

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Katie Donaldson

I went full time crypto back in June 2018, and have never looked back. I want to help persuade as many people as possible to come and build the decentralised future! Let’s go!

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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