The Australian Securities Exchange (ASX) has received its first-ever application for a spot BTC ETF, an exchange-traded fund, under the country’s new regulatory standards. Monochrome, a Bitcoin asset management company, announced it on Friday. It has submitted an amended application for the Monochrome BTC Exchange Traded Fund (IBTC) in collaboration with Vasco Trustees. This ETF aims to provide retail investors with regulated access to Bitcoin through the ASX.
Cosmos Delists Spot BTC ETF as Monochrome Makes Historic Submission to ASX
This milestone marks the first submission of a spot BTC ETF to the ASX since the implementation of crypto restrictions in the licensing framework nearly 2 years ago. Vasco is a partner of Monochrome. It obtained authorization as a licensed financial institution to manage crypto spot ETFs in Australia earlier this year.
The Australian Securities and Investments Commission (ASIC) updated the requirements for an Australian Financial Services (AFS) license in Oct 2021. In addition, it focuses on enhancing transparency in the crypto market to protect investors. For a spot ETF to receive approval, the underlying cryptocurrency must have institutional support and acceptance.
Currently, there are only 2 AFS licensees permitted to offer retail crypto-asset licenses. However, other licensees are classified as wholesale and have not yet been approved to sell these products to individual investors.
Cosmos Asset Management’s Bitcoin ETF was a contender for the first U.S. Bitcoin ETF. It was structured as a fund of funds, granting access to one of the BTC ETFs managed by Purpose in Canada. However, due to limited demand, Cosmos delisted its product in November. The first Bitcoin ETF to launch in Australia was introduced by Global X and 21Shares.
Bitcoin ETF in Australia Operates through Unique wholesale retail Arrangement
Currently, the Bitcoin ETF in Australia remains active. Global X and 21Shares facilitate a wholesale-retail feeder fund arrangement through which it operates. The newly implemented restrictions target retail funds related to digital assets. The wholesale funds are exempt from these rules.
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According to Monochrome CEO Jeff Yew, their Bitcoin ETF stands out from competitors because it is licensed as a crypto-asset. Moreover, it allows direct holding of Bitcoin at the fund level. Yew expressed confidence in finding a favourable solution despite the challenges faced by previous spot Bitcoin ETFs in Australia.
Renowned financial firms in the US, including BlackRock, Invesco, and WisdomTree, have recently shown renewed interest in BTC ETFs. Moreover, these developments indicate a growing recognition of the potential of Bitcoin ETFs as a mainstream investment option.