Bank of America clears crypto ETPs for hedge funds in Europe: sources

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Bank of America’s main brokerage unit has started clearing and settling cryptocurrency exchange traded products (ETPs) for hedge funds in Europe, according to three sources with knowledge of the matter.

This is the second recent move by the traditionally conservative bank in the volatile cryptocurrency arena. As reported last week by CoinDesk, Bank of America has also approved bitcoin futures trading for certain clients and is handling the clearing of cash-settled contracts.

Bank officials may have felt they can’t ignore an asset class that many companies have dived into. The demand for products such as FTEs has increased.

Related: EU Policy Makers Propose Tighter Regulation of Crypto Transfers

In February, it emerged that Goldman Sachs, ICAP, JPMorgan and UBS had all purchased the 21Shares Polkadot ETP for clients, according to Bloomberg data. In June, ETC Group launched the UK’s first bitcoin ETP on the Aquis Exchange in London.

There has also been a growing number of cryptocurrency ETPs listed on the SIX exchange in Switzerland and on Deutsche Boerse’s Xetra marketplace in Germany. Offers range from blue chips (bitcoin, ether) to exotic (cardano, polkadot.)

According to CoinDesk sources, hedge funds are using Bank of America’s main brokerage unit to access a series of crypto ETPs approved by European regulators. The vehicles allow large companies to invest in various corners of the crypto universe without investing directly in crypto, but through security that tracks the performance of various digital assets.

A Bank of America spokesperson declined to comment.

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