As demand for cryptocurrencies continues to surge, companies are looking at the prospect of launching exchange-traded funds (ETFs) to provide exposure to investors. In Australia, securities regulators appear open to the prospect of allowing these financial instruments, although as usual, structures need to be in place.
Building the Right Structure
Last week, the Australian Financial Review reported that the Australian Securities and Investments Commission (ASIC), the country’s financial regulator, is actively considering allowing Bitcoin ETFs to launch and operate within the country.
Per the report, the agency had clarified its position after rejecting an ETF proposal from Cosmos Capital, a local crypto infrastructure and investment company.
The report explained that James Manning, Cosmos’ chief executive, accused the ASIC of having an unreleased policy that doesn’t allow for the launch of any Bitcoin ETF. However, ASIC Commissioner Cathie Armour explained that the agency is merely looking to build the proper rules for regulating such a product.
Speaking with the Senate select committee on financial technology, Armour reportedly said:
“For any products to be quoted on exchange markets in Australia, the particular market needs to have in place rules that facilitate the quoting of products […] Not all markets have rules in place that do that. […] These products can be made available to Australians through a managed investment scheme regime, and Australians can invest in these products in that way.”
Armour posited that Bitcoin ETFs could eventually fall under the AQUA Rules from the Australian Securities Exchange (ASX), which govern financial products’ operation on the exchange. As for Cosmos, the company had apparently tried to list its ETF on the National Stock Exchange of Australia – which doesn’t have any such rules.
The Australian Financial Review added that Cosmos could be looking to tweak its ETF proposal and instead attempt a listing on the ASX.
Bitcoin ETF Race Heats Up
Bitcoin ETFs have become especially prominent in several developed markets, with demand for the leading cryptocurrency surging among professional investors. By following the ASX’s rules, Cosmos could very well launch Australia’s first Bitcoin ETF.
Another country that just broke ground with a Bitcoin ETF is Canada. Last week, the Ontario Securities Commission (OSC) officially greenlit an ETF from Accelerate Financial, an investment advisory firm based in Winnipeg. Per a document, the ETF has been approved and will be operational in several territories across Canada. These include British Columbia, Quebec, Alberta, Nova Scotia, Newfoundland, and more.
Called the Accelerate Bitcoin ETF (ABTC), the ETF is now the first approved product of its kind in North America, and Accelerate Financial has also secured a receipt of the preliminary prospectus from the country’s securities regulators.
The fund will offer its denominated in USD and CAD, with a 0.7 percent management fee. Accelerate Financial has also applied to list units of the ETF on the Toronto Stock Exchange.
As for the United States, crypto investment firm bitwise Asset Management has filed for a Bitcoin ETF with the Securities and Exchange Commission (SEC). This won’t be the first time that the firm is making such a filing, although there are hopes that the Biden administration could finally break the SEC’s cycle of rejecting Bitcoin ETF proposals.