In Australia, exchange-traded products (ETPs) may be approved soon for qualifying cryptocurrencies, according to the Australian Securities and Investments Commission (ASIC).
ASIC’s latest report reveals consumers’ overwhelmingly positive viewpoint on crypto ETPs after a four-week consultation period.
“There was near-unanimous support for ETPs and other investment products that provide exposure to crypto-assets being facilitated within the regulatory framework administered by ASIC…
We recognize the interest in, and demand for, ETPs and other investment products that hold crypto-assets in Australia. However, we are also aware of the real risk of harm to consumers and markets if these products are not developed and operated properly.”
According to ASIC, a cryptocurrency would qualify for an ETP only if it meets the following criteria:
- high level of institutional support and acceptance for investment purposes
- presence of service providers such as custodians, fund administrators, index providers and market makers willing to support and invest in the ETPs exposed to the underlying crypto asset
- a mature spot market
- existence of a regulated futures market linked to the crypto asset,
- the availability of transparent pricing mechanisms.
ASIC believes that only two cryptocurrencies currently on the market have a shot at meeting these requirements.
“We also stated that, in our view, the only crypto-assets that are likely to satisfy these factors at this point in time are Bitcoin and Ether.”
Australia’s top regulator adds that funds looking to launch Bitcoin or Ethereum ETPs must have a responsible entity who will “ensure crypto-assets are held in safe and secure custody.”
Eligible funds are also expected to carry out the trading of crypto assets on platforms that are subject to know-your-customer (KYC) and anti-money laundering and counter-terrorism financing (AML/CTF) obligations.
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Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
