India to soon get Exchange-Traded Funds for Bitcoin, Ethereum: Report


Months after US approved Bitcoin Exchange Traded Funds (ETF), India might follow suit and is likely to get ETFs for Bitcoin and Ethereum in coming days, reports have claimed.

According to a report by The Financial Express, Torus Kling Blockchain IFSC, a joint venture between Cosmea Financial Holdings and Kling Trading India, has signed a memorandum of understanding (MoU) with India INX to launch the country’s first cryptocurrency ETF. As per the MoU, India INX will be the trading platform and Cosmea Financial Holdings will do the distribution, while Kling Trading will be the technology partner.

For the uninitiated, India INX is India’s first international stock exchange and subsidiary of Bombay Stock Exchange. A crypto ETF is an investment vehicle that allows investors to diversify their investments without actually owing the asset. An ETF keeps track of the price fluctuations of an underlying asset like Bitcoin or Ethereum, giving people an alternative to extract profits from the price trend without really owning even one unit of the crypto asset.

For instance, a Bitcoin ETF holder won’t be directly invested in Bitcoin itself, so they will not have to worry about the complex storage and security procedures required of cryptocurrency investors.

“India INX at GIFT IFSC is looking at exploring the launch of Digital Asset based products and has already made an application to IFSCA under Regulatory Sandbox. This is a part of our product innovation initiative to benchmark offerings with other international finance centers. We will be launching products in these new-age assets in compliance with the prevailing laws after receiving all required post regulatory approvals,” said Mr. V.Balasubramaniam, the Managing Director and CEO of India INX.

Meanwhile, it was not so easy to launch the first Bitcoin ETF in the US. The reason was that Bitcoin, the largest cryptocurrency in the world, is still unregulated and is susceptible to extreme volatility. In addition, the US Securities and Exchange Commission (SEC) was hesitant to allow an ETF focused on the then-new and broadly unproven cryptocurrency market to make its way into the community.

However, after 8 long years of struggle, the first application for a Bitcoin ETF trade, at the New York Stock Exchange (NYSE), was filed in the US first Bitcoin ETF in the United States began trading on October 19 2021. Now, India might escalate its game by permitting the launch of not only Bitcoin ETF but also Ethereum futures ETF.

“Crypto assets will be big in future. Gift City is looking at being a leader in dollar assets. Application has been made jointly with INX and we are expecting an approval by March this year. This is a new asset class and will create an opportunity for domestic and international investors to invest in digital assets. We want to bridge the gap between the digital assets market and regulated markets,” said Krishna Mohan Meenavalli, CEO, Torus Kling Blockchain IFSC.

Read More: India to soon get Exchange-Traded Funds for Bitcoin, Ethereum: Report

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