This country will launch Asia’s first crypto ETF

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Highlights

  • Asia’s first cryptocurrency exchange traded fund (ETF) would be launched in India by March 2022.
  • According to reports, the fund is likely to be launched in the sandbox environment.
  • The trading is expected to be allowed through a regular investment account.

Asia’s first cryptocurrency exchange traded fund (ETF) would be a reality soon. The crypto ETF would be available in the Gujarat International Finance Tech (GIFT) City, Gujarat (India), by March 2022.

A memorandum of understanding (MoU) has been inked between Torus Kling Blockchain IFSC, a joint venture between Mumbai-based Cosmea Financial Holdings and Hyderabad-based Kling Trading India, and Bombay Stock Exchange’s (BSE) international arm, India INX, to develop digital asset-based products in India.

According to reports, the fund is likely to be launched in the sandbox environment. It helps in live testing products for emerging risks and correcting them before they can affect a large number of investors.

As soon as the ETF gets regulatory approvals, Indian investors will be able to invest in it using the RBI's liberalised remittances scheme (LRS) route.

The trading is expected to be allowed through a regular investment account, bypassing the risks associated with cryptocurrency exchanges.

Image source: © Yur4you | Megapixl.com

Torus Kling Blockchain is reportedly targeting US$1 billion in assets in the first couple of years of the launch.

What are crypto ETFs?

Cryptocurrency ETFs provide an option to investors to track cryptocurrency returns without investing in digital tokens themselves. Similarly, Future ETFs are backed by futures contracts, which speculate on volatile prices of cryptocurrencies in the market.

While annual cryptocurrency derivatives trading volume stands at nearly US$3.2 trillion, spot volume is nearly US$2.7 trillion, according to global estimates.

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