Australia approves Crypto Spot ETFs

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As the United States opens its doors to cryptocurrency exchange-traded funds (ETFs), Australia is also moving forward with its own crypto programs with the approval of spot-price ETFs for bitcoin and ether.

The Australian Securities and Investments Commission (ASIC) has also instituted guidelines and requirements on how issuers should offer crypto-based fund products. One of those requirements is for security, which has been a major point of contention between regulatory oversight bodies when it comes to the approval of cryptocurrency-based ETFs.

ASIC noted that private keys should be kept offline through cold storage instead of being held in a public storage option, such as an exchange. To add an additional layer of security, issuers should maintain backups of private keys in various geographic locations.

“The approval will allow Australian investors to gain direct exposure to the price of physical assets through funds traded on the Australian Securities Exchange (ASX),” notes an Investopedia article. “It also reinforces Australia’s intention for digital innovation and opens the door for regulators in other jurisdictions to accelerate spot crypto ETFs as the asset class continues to gain traction with investors. “

ASIC’s approval comes less than a month after the ProShares Bitcoin Strategy ETF (BITO) began trading on the New York Stock Exchange after being blessed by the US Securities and Exchange Commission (SEC). United. Bitcoin purists may be lukewarm about a futures ETF, but spot-priced ETFs can provide more pricing precision.

“We recognize the interest and demand for Exchange Traded Products (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, ”ASIC said in a statement.

As the US waits for an ether-focused ETF, this could open the floodgates for more interest in alternative coins. With ASIC approval for bitcoin and ether, it is only a matter of time before alt coin ETF products enter Australian capital markets.

“This will be a huge step forward, as investors will finally be able to access Bitcoin through a liquid and profitable investment vehicle. As more digital assets mature, we expect the reach to expand, ”VanEck Asia Pacific Managing Director Arian Neiron said in The Australian Financial Review.

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